Reaction

China’s first retaliation to the U.S. bill supporting pro-democracy movements in Hong Kong has avoided any measures related to trade. A Foreign Ministry spokeswoman said sanctions would be put on U.S. human-rights organizations operating in the city, while Hong Kong port visits by U.S. Navy ships would be suspended. The statement promised that China would take “further necessary actions” without signaling what they might be. Meanwhile, the world’s second-largest economy may be on the road to stronger output after the Caixin manufacturing index rose to 51.8.

Trump says no

Through his lawyer, President Donald Trump said that he will not take part in the House Judiciary Committee panel’s first impeachment hearing on Wednesday, while keeping open the option to be represented at future sessions. Pat Cipollone, counsel to the president, said the entire process has been unfair to Trump. This week’s hearings will give Democrats the chance to turn weeks of testimony into a narrative to win over voters, while allowing Republicans to defend the president. Trump, meanwhile, is travelling to London for a NATO Summit.

European politics

There were more signs that German Chancellor Angela Merkel’s ruling coalition could be entering its final days over the weekend when the Social Democrats picked government critics Norbert Walter-Borjans and Saskia Esken as new party leaders. Merkel’s CDU party said there would be no renegotiation of the terms of their alliance, adding the SPD can quit government if they can’t accept that. In the U.K. campaigning for the Dec. 12 election focuses on security after last week’s terror attack in London that left two victims dead.

Markets rise

The positive manufacturing data from China, coupled with better-than-forecast European numbers, is giving stocks a lift. Overnight, the MSCI Asia Pacific Index rose 0.5% while Japan’s Topix index closed 0.9% higher. In Europe, the Stoxx 600 Index was 0.4% higher at 5:50 a.m. Eastern Time with miners and oil companies among the best performers. S&P 500 futures pointed to a gain at the open, the 10-year Treasury yield was at 1.848% and gold was lower.