Trump Bumps Risk Appetite By Signing Hong Kong Bill

Well, Trump finally did it. He signed the Hong Kong Treaty after UK markets closed, sending risk appetite into a tailspin.

Well, Trump finally did it (no, not the Putinesque image of himself as a boxer) – he signed the Hong Kong Treaty after UK markets closed, sending risk appetite into a tailspin.

As always, his timing raises questions, given the US markets had closed ahead of tomorrow’s Thanksgiving public holiday. But then I guess this also allows him pump-up the markets again with the usual “talks are going well” spiel in due course. Still, China have vowed to retaliate so we’ll see what comes of it.


As we’d expect, risk-assets got smashed, money flowed into safe-haven assets such as JPY, CHF and gold and out of risker assets such as equities and commodity FX. At the time of writing, S&P E-mini futures are down -0.3% from their record highs and close to testing yesterday’s low.

Risk appetite from here will likely be dictated by China's response and how detrimental it's perceived to be for the trade deal

The S&P500 E-mini is on track to close with a bearish 2-bar reversal pattern (dark cloud cover) at record high. Moreover, it has occurred outside the upper Keltner bands which places potential for mean reversion on the cards. Today’s news is not yet enough to go all out bear and call a top (as this rarely ever works out well) but given the timing of the news, once layered with the technicals, then a deeper pullback is not out of the question if tensions escalate.


  • Trend remains bullish above 3090.75.
  • Bulls could wait for the dust to settle and looks for prices to stabilise around 3132.50 support before considering long setups (whilst monitoring sentiment surrounding trade of course).
  • A break above 3154.75 assumes Trump has pumped ‘his’ stock market high, or its all water under the Bridge where China is concerned.

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