Chinese Checkers.

Wednesday was all about China.

“China?! China.”

 

U.S. investors woke up to news that Beijing is considering “slowing or halting” Treasury purchases and the knee-jerk reaction was visible everywhere. Yields spiked (only to completely retrace as Treasurys pared losses following a solid 10Y auction):

Gold rose:

The dollar careened lower and EURUSD jumped (one natural way for the Chinese to diversify would be to increase their allocation of euro debt):

And futs dipped:

You’ll note that China may be reminding Trump that they have a way to fight back in the event the administration gets “tough” on trade. For more on what very well could be going on in the minds of the Politburo, see here.

But as indicated in the ES chart above, the China headlines weren’t the only notable news on Wednesday. Late in the session, we got this:

• CANADA IS SAID INCREASINGLY CONVINCED US LEAVING NAFTA: REUTERS

Well needless to say, that weighed on the peso and the loonie:

Which in turn changed the decision calculus for Poloz:

Odds of a BoC hike next week go from 84% to 64% pic.twitter.com/KEIKcGCVNz

— Luke Kawa (@LJKawa) January 10, 2018

But then we got this:

• WHITE HOUSE OFFICIAL: NO CHANGE IN TRUMP’S POSITION ON NAFTA

Which I suppose means Trump thinks this about Trudeau:

GM had a helluva hard time figuring that schizophrenic shit out:

Oil chopped around after the EIA number (large draw, but meager compared to API) but ultimately ended up higher, extending a run that has crude sitting at a more than three-year peak:

European shares closed lower after failing to recover from declines seen around the China headline:

Oh, and the Hang Seng has risen for 12 straight sessions. That would be the longest streak since it was launched in 1969:

Finally, here’s the President of the United States suggesting that he is literally going to change the libel laws so he can sue people for negative press coverage:

President Trump: "We are going to take a strong look at our country's libel laws … You can't say things that are false, knowingly false, and be able to smile as money pours into your bank account." pic.twitter.com/FUK7CTxOQb

— NBC News (@NBCNews) January 10, 2018