Financial markets adjust to political risk

<p>Kia ora,</p><p>Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news financial markets are adjusting to the rising political threats.</p><p>But first in China, Beijing is focused on food security, <a href="http://www.gov.cn/premier/2022-02/13/content_5673366.htm" target="_blank"><strong>promising more support</strong></a>, especially for their winter wheat plantings which are described as 'weak'.</p><p>The sluggish Chinese economy is pumping up household savings, and <a href="https://www.caixinglobal.com/2022-02-12/chinese-households-add-851-billion-to-savings-in-january-101840798.html" target="_blank"><strong>Chinese households turn risk-averse</strong></a>. It seems when it comes to their money, Chinese are sceptical of "Xi Jinping Thought' and have their doubts about the future. Their household sector is <a href="http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/4468668/index.html" target="_blank"><strong>reluctant to spend</strong></a> and the corporate sector's demand for long-term loans remained weak.</p><p><a href="https://eng.stat.gov.tw/point.asp?index=2" target="_blank"><strong>Taiwanese inflation</strong></a> rose to 2.8% in January, and although it is rising, it remains well controlled there. Their PPI remains high, although it was flat in January from December, suggesting it is past its peak.</p><p>Meanwhile, <a href="https://www.mof.gov.tw/singlehtml/384fb3077bb349ea973e7fc6f13b6974?cntId=763da5f851d240dd978de594b06506a5" target="_blank"><strong>Taiwanese exports</strong></a> remain very high, although they did slip in January from December. Recall, there is no base effect in these levels, with the island nation a regional export powerhouse.</p><p>On Friday noted that a small +US$25 bln surplus was expected in the <a href="https://fiscal.treasury.gov/files/reports-statements/mts/mts0122.pdf" target="_blank"><strong>US Federa