China

China warned the U.S. on Wednesday not to adopt punitive currency policies after Republican presidential front-runner Donald Trump nudged up another victory in Nevada. Free Bacon reports: Foreign Ministry spokeswoman Hua Chunying told reporters in Beijing that “we are following with interest the U.S. presidential election.” Hua was asked about China’s response to a possible Trump presidency and his announced plan to punish China for currency manipulation with a tax on Chinese goods.

After a burst of volatility in the developed market over the past month, one odd outlier was China, where after a surge of gut-wrenching moves in both its currency and equity markets (recall that it was China's troubles with marketwide circuit breakers at the start of January that may have catalyzed the global volatility wave), Chinese stocks remained relatively quiet and resilient, levitating quietly day after day. That all changed overnight when the Shanghai Composite plunged by 6.4% with the drop accelerating into the close.

On Tuesday, multiple media outlets jumped at the opportunity to report that China has built radar facilities at Cuarteron Reef, Beijing’s southern-most South Pacific sandcastle.

“New radar facilities being developed in the Spratlys, on the other hand, could significantly change the operational landscape,”  Gregory Poling of CSIS’s Asia Maritime Transparency Initiative said, explaining why the radar installations are actually a bigger deal than the deployment of HQ-9 surface-to-air missiles on Woody Island.

Unlike Monday's global PMI deterioration (which sent markets around the globe soaring), there was little in terms of macroeconomic data overnight (German IFO earlier missed on expectations and business climate but beat on current assessment) so the "market made the news." These came most from the USDJPY which has continued to fall, sliding to 111.85 overnight, and dragging the Nikkei to a -0.4% drop.

If China's recent record surge in loan creation, and its revision of a key PBOC capital outflow "data" wasn't sufficient proof that the world's second largest economy is on the verge of panic, then the explicit propaganda directive issued to the the local press by China's president Xi Jinping late on Friday should certainly seal it.

As SCMP reports, according to a commentary published by a leading mouthpiece online "having public opinions that are different from the official ones will shake the foundation of the rule of the Communist party and the country."