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"Sea Of Red" - China Stocks, Commodities Crash As Trade Wars Escalate
03-22-2018, 09:51 PM,
"Sea Of Red" - China Stocks, Commodities Crash As Trade Wars Escalate
"Sea Of Red" - China Stocks, Commodities Crash As Trade Wars Escalate

<p><u><strong>Update 2145ET:</strong></u> China markets have opened and its a bloodbath...</p>

<p>Stocks are down 3-5% across the board at the open with CHINEXT (China tech) plunging most...</p>

<p><a data-image-external-href="" data-image-href="/sites/default/files/inline-images/2018-03-22_18-45-32.jpg?itok=-yAUyJ5b" data-link-option="0" href=""><img data-entity-type="file" data-entity-uuid="07bc69a6-dc0d-4b73-960c-f7b43bb49a5e" data-responsive-image-style="inline_images" height="261" width="500" srcset=" 1x" src="" alt="" typeof="foaf:Image" /></a></p>

<p> </p>

<p>And China commodities are in freefall with Rubber futures limit down, Iron Ore and Steel Rebar down hard</p>

<p><a data-image-external-href="" data-image-href="/sites/default/files/inline-images/2018-03-22_18-47-29.jpg?itok=JbtvyKIJ" data-link-option="0" href=""><img data-entity-type="file" data-entity-uuid="f4ca9651-4092-4068-a9a8-96073c8c4c96" data-responsive-image-style="inline_images" height="261" width="500" srcset=" 1x" src="" alt="" typeof="foaf:Image" /></a></p>

<p>*  *  * </p>

<p><strong>Update 2115ET:</strong> AsiaPac stocks are a sea of red but there is one relief as China fixes the Yuan very modestly weaker - so no devaluation tonight...</p>

<p><a data-image-external-href="" data-image-href="/sites/default/files/inline-images/2018-03-22_18-16-40.jpg?itok=h6BN4-5O" data-link-option="0" href=""><img data-entity-type="file" data-entity-uuid="24d2655f-3d28-4ab8-9752-cecebce12179" data-responsive-image-style="inline_images" height="451" width="500" srcset=" 1x" src="" alt="" typeof="foaf:Image" /></a></p>

<p>*  *  *</p>

<p><u><strong>Update 1</strong></u>: Japanese stocks just broke key technical support at the 200-day moving average, dropping near 6-month lows...</p>

<p><a data-image-external-href="" data-image-href="/sites/default/files/inline-images/2018-03-22_17-37-44.jpg?itok=66z4k5sK" data-link-option="0" href=""><img data-entity-type="file" data-entity-uuid="24aaea8a-927a-4baa-96ea-77c47c3336dd" data-responsive-image-style="inline_images" height="262" width="500" srcset=" 1x" src="" alt="" typeof="foaf:Image" /></a></p>

<p>Japan eseTrade Minister Hiroshige Seko told reporters:</p>

<p><em><strong>It’s “very unfortunate” that the U.S. decided to apply tariffs to Japanese metals exports, but retaliation by Japan could lead to the collapse of the free-trade system.</strong></em></p>

<p>He noted that he had repeatedly asked the U.S. for Japan to be exempted from tariffs, and will continue to do so.</p>

<p>*  *  *</p>

<p>As we detailed earlier, following the earlier threat from the Chinese embassy, the first retaliatory trade actions from China are emerging and<strong> US and Japanese equity markets are in freefall...</strong></p>

<p><a data-image-external-href="" data-image-href="/sites/default/files/inline-images/China-vs-America-Dragon-arm-wrestling-Eagle-1-600x335_0.jpg?itok=y8eKv5o_" data-link-option="0" href=""><img data-entity-type="file" data-entity-uuid="4c13599b-32c3-4cf1-967b-4e627faeca52" data-responsive-image-style="inline_images" height="279" width="500" srcset=" 1x" src="" alt="" typeof="foaf:Image" /></a></p>

<p>Following the US imposition of 25% duties on China produce worth at least $50 billion including items in aerospace, information and communication technology and machinery, China has announced plans of reciprocal tariffs on $3 billion of U.S. imports.</p>

<p>China plans to add <strong>15% tariffs on U.S. steel pipes, fruit, wine and other products</strong>, the Ministry of Commerce says in a statement, and also plans to add <strong>25% tariffs on pork and recycled aluminum.</strong></p>

<p>Bloomberg provides some more details on the list of goods China will be targetting...</p>

<p><em>1) fresh fruit, dried fruit and nuts</em></p>

<p><em>2) wine</em></p>

<p><em>3) denatured ethyl alcohol</em></p>

<p><em>4) American ginseng</em></p>

<p><em>5) seamless steel pipes</em></p>

<p><em>6) pork and pork products</em></p>

<p><em>7) aluminum scrap</em></p>

<p>Who knew America exports ginseng to China?</p>

<p>In the statement, <strong>China urged the U.S. to resolve the trade dispute via dialogue.</strong></p>

<p>The reactions are ugly.</p>

<p><a data-image-external-href="" data-image-href="/sites/default/files/inline-images/2018-03-22_16-44-01.jpg?itok=4CF6heuS" data-link-option="0" href=""><img data-entity-type="file" data-entity-uuid="37dcfa59-856f-4365-bcbb-c3794ed191cc" data-responsive-image-style="inline_images" height="320" width="500" srcset=" 1x" src="" alt="" typeof="foaf:Image" /></a></p>

<p>USDJPY is in freefall, plunging below 105.00 to its lowest since before Trump's election...</p>

<p><a data-image-external-href="" data-image-href="/sites/default/files/inline-images/2018-03-22_16-40-25.jpg?itok=jM5Elw06" data-link-option="0" href=""><img data-entity-type="file" data-entity-uuid="ce33b79a-68e6-4d3a-b912-780a7be18470" data-responsive-image-style="inline_images" height="258" width="500" srcset=" 1x" src="" alt="" typeof="foaf:Image" /></a></p>

<p> </p>

<p>Nikkei is set to open down over 3.5% and Dow futures are down another 200 points from the close...</p>

<p><a data-image-external-href="" data-image-href="/sites/default/files/inline-images/2018-03-22_16-41-27.jpg?itok=Rc-Zgcml" data-link-option="0" href=""><img data-entity-type="file" data-entity-uuid="22d0e555-1825-4c9e-8599-a4d014dd47bd" data-responsive-image-style="inline_images" height="328" width="500" srcset=" 1x" src="" alt="" typeof="foaf:Image" /></a></p>

<p>Based on the rally in Treasury futures, 5- to 10-year Treasury yields will open 2.5-3bps lower.</p>

<p>As Bloomberg's Enda Curran notes, China's response was to be expected but it's clearly only an opening play. <em><strong>Note the list of tariffs doesn't include politically sensitive imports like soybeans. It's a warning shot from Beijing. </strong></em></p>

<p>All eyes will now be on the PBOC's Yuan fixing, as offshore yuan has been tumbling...</p>

<p><a data-image-external-href="" data-image-href="/sites/default/files/inline-images/2018-03-22_16-51-57.jpg?itok=vccjZcr0" data-link-option="0" href=""><img data-entity-type="file" data-entity-uuid="d4a6d484-aad7-4e7b-add4-93ef49beaa71" data-responsive-image-style="inline_images" height="263" width="500" srcset=" 1x" src="" alt="" typeof="foaf:Image" /></a></p>

<p>It would be a big shock if China decides to devalue suddenly as a trade weapon.</p><img src="" height="1" width="1" alt=""/>

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