Just like the comforting but repetitive riffs of AC/DC, which frankly do all start to sound the same after a while, the Wall Street Journal's dynamic duo of Steven Mnu-China whisperers are again selling us the headline that "US, China Close In on Trade Deal", stating some tariffs could come down, that China would raise agri and energy purchases (in 2023!), and that this could all be signed by the end of March. AUD and NZD jumped as a result. Given market sentiment is driven by headlines and not the details of stories its only when you dig deeper one finds that "hurdles remain," and that both sides have hardliners not wanting to give the other side too much.

Moreover, the part of the deal where China speeds up the timetable for removing foreign-ownership limits on auto firms and reduces tariffs on imported vehicles is not placed alongside news that their auto industry is running at 50% capacity, car sales are hugely negative y/y, and China is about to halt state subsidies for Electric Vehicle production: why wouldn't Beijing encourage foreign capital when they are bleeding like that? It also doesn't sit well with China shooting down a mild WTO report stressing China needs to reform its SOEs.

Importantly, the Journal also admits this deal depends on the standoff of Beijing insisting the US drop tariffs first, and the US insisting China reforms first and then tariffs follow later, which sounds very North Korean to me. As Trump tweeted on Friday: "I have asked China to immediately remove all Tariffs on our agricultural products (including beef, pork, etc.) based on the fact that we are moving along nicely with Trade discussions and I did not increase their second tranche of Tariffs to 25% on March 1st. This is very important for our great farmers - and me!" And did anyone see Trump's 2-hour plus speech at CPAC over the weekend? He went entirely off-script, argued the US Dollar was too strong, and yet did not look or sound like a man about to reach for a weak deal that would irritate his base and provide an opening for the Democrats to attack him as soft on China. So if we are to see even a milquetoast Donaldtov-Xibbentrop trade deal --which is going to hurt Australia a lot, so it's a good job they are signing an FTA with Indonesia today-- China is going to have to blink in front of the world.

Yet if you want a real indication the US and China are not friends look at Huawei: the extradition of their CFO Meng Wanzhou to the US from Canada for bank fraud cleared a key hurdle on Friday. The extraordinary lengths China is going to in regards to the firm continues to underline suspicions it is not just an ordinary private enterprise: paid press-junkets; creepy Stalinist videos of children singing its praises; open threats being made to Canada for complying with the rule of law; and the farcical news Meng, living a comfortable life on bail at her luxury home in Vancouver, is suing the Canadian government over her "illegal" arrest procedure. I'm sure the detained Canadian Michael Kovrig, who has disappeared into the same kind of black-hole the former Chinese head of Interpol did --to zero Khashoggi-style outrage-- would happily change places. Anyway, put Huawei with Friday's GDP and do you want to be long CAD?