It took them a few sessions, but the markets are finally started to pay attention to this week’s China-Hong Kong developments – and what that means for the relationship between Beijing and Washington.
With China’s parliament rubber-stamping the new national security laws set to be imposed on Hong Kong, sending armed police to swarm the streets of the administrative region in an attempt to combat pro-democracy protests, Donald Trump has promised to hold a press conference this Friday.
It will potentially outline the actions the President is set to take against China, the said same vague actions he threatened if China passed the security laws earlier in the week.
This has been seen by investors as a step towards escalation, especially since the impending press conference was preceded on Wednesday by the House passing a bill condemning China’s detention and torture of Uighur Muslims.
The Dow Jones did a sharp U-turn last night, swinging around 350 points as it ended 150 points in the red, a move that set the tone for the European open.
The FTSE shed 50 points to fall back under 6200, while the DAX shed 1.4% and the CAC lost 1%.
Currently the Dow Jones is set to hold fairly steady, with the futures forecasting a 0.1% decline. However, that is likely a placeholder move until Donald Trump reveals his intentions.
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