By Lorcan Roche Kelly
The Congressional bill in support of demonstrators in Hong Kong that’s expected to be signed by President Donald Trump is renewing market worries that the confrontation may scuttle the phase-one trade deal. Chinese Ministry of Commerce spokesman Gao Feng said that both sides continue to work towards an agreement, with the country’s chief negotiator Vice Premier Liu He saying that he is “cautiously optimistic.” The Wall Street Journal this morning reported that U.S. negotiators have been invited to Beijing for more talks.
The most explosive moments of the impeachment inquiry yet included Gordon Sondland, the U.S. ambassador to the European Union, saying yesterday that President Trump effectively directed him to broker a quid pro quo with Ukraine. Sondland testified that “everyone was in the loop,” a revelation that may mean Democrats will push for an appearance from high-profile witnesses like Secretary of State Michael Pompeo or Rudy Giuliani, who have so far refused to cooperate. Today the inquiry will hear from Fiona Hill, the former National Security Council director on Russia and Eastern Europe.
War on the wealthy
British opposition Labour Party leader Jeremy Corbyn will unveil an election manifesto today promising radical changes across the economy, with “bankers, billionaires and the establishment” targeted. For all the noise that the launch is likely to create, markets still only see a Conservative victory in the Dec. 12 vote. There is little sign of any doubts creeping into that view, with sterling volatility remaining anchored in the wake of the first leaders debate.
Markets off lows
Fears over the Congressional Hong Kong bill were easing somewhat as China held the line on trade progress. Overnight, the MSCI Asia Pacific Index slipped 0.7% while Japan’s Topix index closed 0.1% lower, well off the lows of the session. In Europe, the Stoxx 600 Index was 0.4% lower at 5:45 a.m. with industrial stalwart Thyssenkrupp AG plunging as much as 12% after announcing it was suspending its dividend. S&P 500 futures had recovered to point to a flat open, the 10-year Treasury yield was at 1.762% and gold was lower.
The minutes of Mario Draghi’s last ECB meeting are published at 7:30 a.m. The November Philadelphia Fed Business Outlook and weekly jobless claims are at 8:30 a.m. More positive news on the housing market is expected in Home Sales data for October at 10:00 a.m. Cleveland Fed President Loretta Mester and Minneapolis Fed President Neel Kashkari are today’s monetary policy speakers. Retailers will be in focus in earnings with Macy’s Inc., Nordstrom Inc. and The Gap Inc. all reporting.