Keep your friends close, and your creditors closer
- Trump's suggestion that the 'One China' policy may be a bargaining chip has provoked a strong reaction in the Chinese media. China may want to consider its own bargaining chips - in particular its past role in propping up the Treasury market and the US dollar.
- Things are stirring in the oil market with Saudi Arabia pledging "substantial" cuts below the agreed targets. Oil prices have risen enough to have an economic effect (on OPEC fiscal positions and OECD inflation) but not enough to have a dramatic effect on fundamentals.
- Italy has nominated a new prime minister - Foreign Secretary Gentiloni is up for the job. There is some urgency as the ECB refused to give the bank Monti dei Paschi extra time to raise capital, and it is thought by some that a functioning Italian government might help the situation.
- The data calendar is very quiet today. UK house prices from Rightmove weakened again, focused on prime central London and suggesting weaker international demand. Outer London prices are still up on the year.