The last couple of days are a good example of how investors can lose sight of the symmetric nature of global politics, with progress on both the Brexit and trade front. Not that any deal has been reached, but the sudden swing in sentiment caught many investors by surprise.
When it comes to Hong Kong, however, those same investors seem somewhat complacent. Today, China threatened to take serious countermeasures if the US Congress approves legislation that basically backs protesters under the Hong Kong Human Rights and Democracy Act. While it’s uncertain if this act will pass the US Senate, it does highlight the magnitude of the developments that are taking place. Hong Kong tensions both within the territory and further afield are unlikely to go away anytime soon. Since Hong Kong is the biggest financial hub in Asia, the impact on overall market sentiment is likely to be greater than anticipated should things escalate. A geopolitical risk to keep an eye on.
