Yesterday, we learned that our suspicions were correct, and that the US-China "Phase One" deal purportedly hashed out between the two sides last week appears to be more of the same disingenuous stalling, and that, fundamentally, the situation hasn't really changed.
And on Tuesday, with the US back from the long holiday weekend, Chinese officials have essentially confirmed that they are back to their old tricks, and that the progress on the 'Phase One' deal that was touted last week is a sham. Beijing can make good on the $50 billion of annual agricultural goods purchases that it has promised - but only if Washington agrees to remove all of the trade war tariffs.
Of course, as President Trump has repeatedly made clear, the tariffs must remain in place until a deal has been implemented and Beijing has proven that it has been abiding by the rules. According to Bloomberg, China will struggle to buy $50 billion of US farm goods unless the tariffs are removed.
Unsurprisingly, futures slumped on the news...
...but they've since rebounded somewhat as renewed Brexit-deal optimism has helped lift risk broadly across the world. Meanwhile, Treasuries have climbed and the curve has steepened, with the 10-year yield falling 5 bps to 1.68%
On Friday, Trump heralded China's promise of more agriculture purchases as a victory for American farmers. Now, it's looking like Beijing is going to press him on that. The message is clear: No more farm goods will be purchased until some or all of the tariffs are removed.