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Illustration: Rebecca Zisser/Axios
The Chinese yuan was allowed to weaken past 7-to-1 against the dollar for the first time ever in offshore markets and the first time in more than 10 years in its onshore market.
Why it matters: The People's Bank of China has aggressively defended the psychologically important 7 level as a matter of policy as the dollar has strengthened over the past 3 years.
What's happening: The PBOC issued a statement early Monday saying the currency had weakened under the influence of “protectionist measures and expectations of further tariffs against China.”
What they're saying: "Gloves are off," WSJ's China policy reporter Lingling Wei said on Twitter. "China’s central bank doesn’t have the authority alone to let the yuan break 7. The move had to be signed off by the top leadership."
The big picture: Analysts expect Trump to hit back, and many have been speculating since last year that the U.S. could begin weakening the dollar as a matter of policy, igniting a currency war.
Wealthy investors and business owners are less worried about politics hurting their investments than they've ever been, a recent survey from international investment bank UBS shows, but mom and pop investors are feeling just the opposite.
Research analysts at Goldman Sachs expect politics will play a major role in dictating the market's winners and losers in 2020, much as it did in 2016.
Why it matters: Industries that are more exposed to government policy and regulation have outperformed the market since Election Day in 2016, analysts said in a Sunday note to clients.
Axios' Felix Salmon included this 2-day chart of what happened to bond yields and stock prices on Wednesday and Thursday in his Edge newsletter on Sunday. It shows 3 things pretty clearly:
Inverted yield curve alert: As recently as July 23, less than 2 weeks ago, the 10-year bond yield was higher than the interest rate on 3-month Treasury bills. Now, the curve is deeply inverted again. The 10-year bond closed at a yield of 1.86% on Friday, with the 3-month note at 2.06%.
A merger between the 2 largest newspaper chains in the U.S., GateHouse Media and Gannett, is expected to be announced this morning, Axios' Sara Fischer tells me.
Why it matters: The combination of the two publishing powerhouses means that a single company would own 1 in every 6 newspapers in the United States, she reported last month.
Between the lines: Shares of Gannett have soared this year while the holding company that owns GateHouse, New Media Investment Group, has seen its stock tumble into negative territory despite the S&P's strong overall performance.
The big picture: Ken Doctor of Nieman Lab reports: "The combination — which parties say will take the Gannett name and its headquarters outside D.C. in McLean, Virginia — produces a company that will likely own and operate 265 dailies and thousands of weeklies across the country. ... It will claim a print circulation of 8.7 million — dwarfing what would become the new No. 2 company, McClatchy, and its 1.7 million."