Considering that in the past 3 months the only daily topic of relevance for the media has been "Donald Trump" both in the US and abroad, one would assume that when it comes to global policy uncertainty the primary source would be, record S&P 500 paradoxically notwithstanding, the United States.
Despite US markets being closed in observance of Washington's birthday, S&P futures spiked during overnight trading, reaching new all time highs before fading some of the gains. Both Asian and European markets traded modestly higher after paring early gains. The U.S. dollar traded in a tight range ahead of a busy week for Federal Reserve events, while the pound rallied the most in more than two weeks ahead of a House of Lords Brexit debate, while South Africa’s rand fell on political turmoil. Oil advanced for a third day and spot gold rose for the fourth session in five.
The US Navy has deployed an aircraft carrier strike group to the South China Sea waters, ignoring warnings from Beijing to cease provocations with China. According to the US Navy, the deployment of USS Carl Vinson, together with aircraft from the Carrier Air Wing 2, and the guided-missile destroyer USS Wayne E.Meyer are part of “routine operations” in the disputed region. Rt.com reports: The deployment of the Carrier Strike Group (CSG) 1 began Saturday, just days after China issued a stern warning to stay away from the area.
North Korea just lost a very big ally.
After a week of jawboning markets into believing that the March FOMC meeting is now "live", it appears China has decided to send a little message.
After weakening the fix by the most since Jan 9th, Chinese money market rates are soaring (1 week CNH HIBOR up 303bps) despite notable liquidity injections...
Of course an unexpected rate hike in March is an implicit tightening of the world's financial conditions and thus liquidity withdrawal... reversing recent improvements in global dollar liquidity.