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AM Notes: Markets immune to Bitcoin contagion

Let's start with the Bitcoin contagion effect...

S&P futures: Gap down with a small push lower on the open, then a retracement to fill that gap...

Aussie Yen followed a similar pattern and is currently trading either side of 84

BUT

Asian indices are (almost) all positive...

There's no real signs of risk sentiment taking a body blow here & no conviction to the moves lower in risk...

Focusing on China: Relations are not improving, but the Huarong situation has calmed for now

Huarong bonds jumped after China’s financial regulator said on Friday that the bad-debt manager was operating normally and had ample liquidity, its first official comments since the company jolted Asian credit markets by missing a deadline to report earnings on March 31.

While the regulator’s statement was hardly a full-throated pledge of government support, it was enough to cement a rally in Huarong bonds from record lows and ease fears of contagion.

The gains continued on Monday.

The U.S. said China continues to focus its policies on exports, and called on its biggest economic rival to implement forceful measures to boost domestic demand.

There are countless examples of CCCP espionage to draw on, and this is the latest to catch my eye

 1/ Bombshell reporting by Dutch newspaper @volkskrant on @Huawei in the Netherlands.

In 2010, KPN commissioned a risk assessment on Huawei. The findings were so damning that KPN never made them public for fear that the company wouldn't survive. https://t.co/FZBgaVOyqK— Martijn Rasser (@MartijnRasser) April 18, 2021 

The report is in Dutch but google translate does a decent job

The headline:

'Huawei was able to eavesdrop on all calls from mobile KPN customers, including those of the prime minister'

Huawei being caught doing this is a long way from breaking news!! and I'm only really highlighting this as further evidence that there's no going back...

The EU had been reluctant to publicly acknowledge or accept the many allegations against the CCP...

Those days are numbered, and trust is increasingly harder to justify with a notable shift taking place across the Western world...  

“Trust is the glue of life. It’s the most essential ingredient in effective communication. It’s the foundational principle that holds all relationships.”

- Stephen Covey

“Trust is like a vase, once it’s broken, though you can fix it, the vase will never be same again.” - Walter Anderson

Trust is at the heart of all relationships, especially business (which is not a zero sum game)...

Even the most apologetic China apologist struggles to justify a relationship based on mutual trust - contrast the U.S.-China relationship with U.S. & Japan here 👇

All relationships are based on trust and geopolitical relationships are no different...

Among allies and trade partners there are implicit assumptions that nations won't target each other directly, with far more to be gained via cooperation than conflict...

Or put another way 👇

"destruction is not profit" - (from the 'broken windows' fallacy)

One other story of note...

The corporate tax battle still has some way to run, and this is definitely a test of the Republican appetite for Bipartisanship..

Looking ahead, it's a VERY quiet start to the week, no central bank speakers of note (FOMC blackout period this week)