China

Unlike yesterday's overnight session, which saw some substantial carry FX volatility and tumbling European yields in the aftermath of the TSY's anti-inversion decree, leading to a return of fears that the next leg down in markets is upon us, the overnight session has been far calmer, assisted in no small part by the latest China Caixin Services PMI, which rose from 51.2 to 52.2 (even if the employment index dropped to a three year low, suggesting China's labor problems are only just starting).

The territorial scramble for various resource rich areas in the East/South China Sea and specifically the Spratly islands has been a major point of contention involving China and most of its regional neighbors, recently expanding to the US which is determined not to let China have the upper hand, for nearly two years now, with occasional episodes of escalation that threaten the regional peace. One such episode took place on Thursday of last week when the Vietnamese coast guard seized a Chinese vessel for intruding into its territorial waters, according to a local report Saturday.

Tigers held in captivity in China are being held in abhorrent conditions so that they can produce “tiger wine” – an aphrodisiac for Chinese men.  According to GeoBeats News: Captive tigers in China are being kept in appalling conditions in order to produce the aphrodisiac known as “tiger wine” for Chinese men, according to animal rights activists. It’s technically illegal in the country to breed the big cats in captivity, however, an exception allows tiger farms to do so if they are professedly in place to deter poaching, reports RT.

The missile that is known as “the world’s longest-range missile”, China’s DF-41, is expected to be complete as early as this year. The DF-41 is capable of striking the United States from anywhere in China. Yahoo News reports: “Given the number of real reported tests, it is reasonable to speculate the DF-41 will be deployed to PLA Strategic Rocket Force bases in 2016,” Richard Fisher, senior fellow at the International Assessment and Strategy Center in Washington told the Financial Times.

When looking back in history, December 23, 2015 may be the date the global trade wars officially began. On that day, as we reported at the time, the U.S. imposed a 256% tariff on Chinese steel imports.

It did so perhaps with good reason: with its local end markets mothballed, China was desperate to dump as much excess capacity as possible offshore with shipments of steel, oil products and aluminum all reaching new highs according to trade data from the General Administration of Customs, and the result was a dramatic drop in US prices.