China

The first train connecting China to Iran via the ancient Silk Road has arrived in the Iranian capital Tehran after traveling for 14 days in a journey of over 10,000 kilometers The train, which was launched in an effort to revive the ancient road, was carrying 32 containers of commercial products originating from China’s eastern province of Zhejiang, according to Iranian media Press TV reports: The trip from China to Iran has taken 14 days over 10,399 (about 6,500 miles), taking the cargo train through Central Asian countries of Kazakhstan and Turkmenistan, Fars news agency reported.

Submitted by Bill Bonner of Bonner & Partners (annotated by Acting-Man.com's Pater Tenebrarum),

“Massive Deterioration” – Worse Than 2008

The Dow is down by almost 9% since the start of the year.

“These developments, if they prove persistent, could weigh on the outlook for economic activity…” proffered a nervous-looking Janet Yellen in her testimony on Capitol Hill. She was signaling to investors.

Smoke signals…

Despite the weakening of the Yuan, China exports collapses 6.6% YoY in January (massively missing the 3.6% increase expected). Imports continued their 15 month series of collapses with a 14.4% plunge (again drastically worse than the 1.8% increase expected). This pushed the trade balance to a record surplus CNY406bn.

In Yuan terms it's ugly... Both imports and exporets were worse than the lowest forecast of all professional economists...

But in USD terms it's a disaster...

With China returning from the Spring Golden Week holiday, it is catch-up time for the Yuan (notably higher against a weakening USD) and Chinese stocks (significantly lower - though not as much as some might have expected given China ETFs). The PBOC strengthened the Yuan Fix by the most since the first week of November, catching it up to the 15 handle strengthening in offshore Yuan since the pre-holiday lows.

The Yuan Fix is significantly higher...

When it comes to geopolitics, all anyone wants to talk about is Syria. And understandably so.

When it comes to financial markets, all anyone wants to talk about is China - an equally understandable fixation.

To be sure, China was already a big driver of risk on/ risk off sentiment going into August of 2015. The “is it a hard landing or is it not” question very often dominated global macro discussions among those who enjoy debating such things.