Although the economic diary was relatively light on relevant data releases, headlines related to the renewed strains between the US and China left investors scratching their heads. During the week, President Trump claimed that Washington and Beijing were very close to make the largest trade deal in history. However, the POTUS added that he stood with Hong Kong protesters. The US Senate passed a bill that requires certification of Hong Kong autonomy and warned China against suppressing protestors violently. The US backing of Hong Kong demonstrators fuelled Chinese anger and officials called upon the US to stop interfering with internal Chinese affairs. Although, US President Trump tried to verbally dissect the two issues, as if they were independent of each other, we believe that Chinese officials could become more reluctant to sign the so-called Phase One trade deal soon if the POTUS signs the bill supporting Hong Kong protesters into law.
These renewed strains come after news that the US and China were in final negotiations over how much tariffs should be rolled back. Since we may or may not receive new relevant pieces of information related to the trade negotiations this week, macroeconomic data releases could return to the focus.
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