Trump, Twitter, China and Treasuries
- The Trump Twitter feed has provoked front page responses in the Chinese media, raising tensions between the two countries. Despite official data on official holdings of US asset suggesting otherwise, China is probably the largest official holder of Treasuries and the US dollar.
- China's media suggested retaliation. Selling or threatening to sell US assets is one conceivable form of retaliation – other countries have used this in the past, and sovereign reserve managers have different objectives from other investors. Portfolio losses in pursuit of policy objectives are generally considered a price worth paying.
- Another day, another opinion poll. This time the German Ifo institute offers their poll on domestic business sentiment. The market gives more attention to these indicators than they perhaps deserve, but the expectation is for sentiment to be stable to slightly more optimistic.
- UK Prime Minister May is to tell Parliament what happened at the recent EU summit. "Nothing much" sums it up. Scotland's government published a report detailing their EU plans. Investors are unlikely to consider it high priority Christmas reading. Fed Chair Yellen and the ECB's Weidmann are both scheduled to speak.