Hong Kong bills intensify Sino-US tensions

The tensions between the US and China intensified overnight after the US House of Representatives approved three bills supportive of Hong Kong protestors, a moved that riled China

The tensions between the US and China intensified overnight after the US House of Representatives approved three bills supportive of Hong Kong protestors, a moved that riled China sufficiently to threaten countermeasures if the bills are signed into law later this week by the US President. The escalation comes only a day after President Trump postponed the next set of tariff hikes on Chinese imports and pushes the prospect of a quick resolution to trade talks further into the distance.

The tensions over Hong Kong have already eroded early gains in Asian markets and will dent some of the optimism building from a first set of positive Wall Street earnings. Results from tech companies have yet to come and the expectations here are that the trade war has significantly dented growth.

Marathon Brexit talks yield no results yet

The EU and Britain continue to toil on a last minute Brexit deal which is still lacking a workable solution for the Irish border. Although some comments from the negotiators indicated that there might be a resolution within hours it may be slightly too optimistic to interpret that as a Brexit resolution as the proposal still has to get past MPs in a vote this weekend. The FTSE is struggling to remain in positive territory as declines in the home building sector and a drop in Hargreaves Lansdown shares balance out rises in pharma and a rally by publishing firm RELX.

The pound, though a touch weaker this morning remains much stronger than it has been for months, trading at $1.2726 against the dollar.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.