Putin Once Again Upsets China's Apple Cart

While no one can accurately predict the full scope of the financial consequences of expelling Russia from SWIFT, the forex markets should give us broad visibility into the global economic shifts being imposed.

With that in mind, it is worth noting that the ruble is dropping like a stone against the Chinese yuan.

If China is Russia's new found trading partner, Beijing is reaping all the benefits.

The yuan is appreciating greatly against the euro as well, although Brussels is faring better than Moscow.

The dollar was up briefly against the yuan before trending down again.

Keep in mind that in recent months the PBOC has been seeking a weaker yuan against the dollar as part of their own internal monetary policy.

China has returned from its week-long holiday. While it is no secret that Beijing is easing (ever more aggressively, prompting fund managers to allocate capital to China at a time when the country is increasingly viewed as non-grata by both the left and right) to stabilize its slumping economy, just as the rest of the world is tightening, moments ago the PBOC underscored its commitment to keeping the yuan on a downward slope when it fixed the yuan at 6.3580. Compared to expectations of 6.3328, this was the weakest fixing on record!

Putin's war has completely derailed Beijing's currency manipulations. There is no way to know all the consequences of this, but is difficult to see Beijing being happy about this.