The key sentence of President Trump’s phone call with the Chinese President Xi reads: “The two leaders discussed numerous topics and President Trump agreed, at the request of President Xi, to honor our "one China" policy,” which by the way had never been formally repudiated by President Trump.

The “One-China policy” refers to the policy that there is only one state called “China”, despite the existence of two governments that claim to be “China”. As a policy, this means that countries seeking diplomatic relations with the People's Republic of China (PRC, Mainland China) must break official relations with the Republic of China (ROC, Taiwan) and vice versa. Both governments agree that there is only one sovereign state encompassing both mainland China and Taiwan, but disagree about which of the two governments is the legitimate government of this state.

By the way, an analogous situation existed with West and East Germany in 1950-1970, North and South Korea until now, and more recently, the Syrian government and Syrian opposition.

So, yes, President’s Trump phone call was very important and maybe the fact that China is still the largest credit holder of the US, which gives them any kind of sway over the US economy could have had some influence on Mr. Trump’s sudden change of attitude towards China, which, at least in my opinion, does not eliminate at all the existing risks concerning the US-China relations in the way as they were repeatedly exposed during Mr. Trump’s campaign.

I don’t know if Mr. Trump’s advisers have had insight of the just released recommendations to the new administration of the “Task Force on U.S.-China Policy” 

The document is surely worth a read.

President’s Trump backtracking from what he said during his campaign is significant. Not just because of what it means for security in the South China Sea, but because it signals that if President Trump is prepared to backtrack on this policy in the face of Chinese pressure, he may be prepared to backtrack on other anti-China policies in the face of Chinese pressure.

Yes, that is relevant information for investors!

In the meantime, we got over the weekend the latest export data out of China that, in dollar terms, increased in January by 7.9 percent year on year (y/y) and to the United States in particular, increased by 5.2 percent y/y.

Please take into account that all Chinese data for January should always be taken with caution because of the effects of the Chinese lunar new year

Besides that, on Friday, Federal Reserve Board of Governors member Daniel Tarullo has presented his resignation to President Trump.

 This was not expected. 

Investors could do well taking notice that Mr. Tarullo was “instrumental” in writing the banking regulations demanded by Dodd-Frank and under his watch, the biggest banks in the US added about $700 billion of loss absorbing capital, which brought their aggregate risk-absorbing equity capital ratio to over 12 percent of risk-weighted assets was up from 5.5 percent in 2009.

As President Trump, has vowed to dismantle the so-called reforms that were passed in the wake of the 2008 crisis, circumstances have now handed him a real opportunity to reshape Wall Street by naming a new Vice-Chair of super vision (top regulator) instead of being obliged to do so through Congress.

Tuesday, Fed Chair Janet Yellen will give her Humphrey Hawkins testimony before the Senate Banking Committee.

US first-quarter economic data to date has been somewhat softer than expected, but hardly a major cause for concern. Inflation has been more visible to the consumer however and there is evidence of wage growth for a wider section of the labor force.

The question for markets and thus for investors is not only whether the Fed Chair chooses to signal any change in emphasis when it comes to the pace of US policy tightening, but also whether there is any change in emphasis when it comes to the method of policy tightening.

This question of quantitative policy has been taken place if public comments from other members of the Fed rely to go by. So, yes this does matter.

The Fed’s attitude to easing bank regulation is also important. Easing regulation is like cutting interest rates, economically speaking.

We’ll see what Yellen says.

Etienne "Hans" Parisis is a bank economist who has advised global billionaires and governments on the financial markets and international investments.