Meanwhile in markets, a quiet start of the week with only modest moves in US Treasury yields and equities while a softer dollar is giving support to commodities.  US Treasury yields are up by several bps this morning, with the 10y trading at a relatively lowly 2.83. Clearly, the psychological level of 3.00 for the 10 year is the proverbial bridge too far. S&P 500 futures are trading at 3,499, up about 50 points from the close following remarks by President Biden that the US is considering to remove some of the Trump tariffs on China. Markets are conveniently ignoring the other Biden headlines, one of which is that the President said “yes” when asked if the US would defend Taiwan against China. In any case, our Morning Note is chockful of Asia-Pacific stories that have a deteriorating security situation as the over-arching theme. That comes with the usual warnings that one day, the US might tell the Europeans to starting defending themselves as it focuses on the strategic priority that is Asia-Pacific.


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