Friday 22nd May: Hong Kong plummets as China talks of new restrictions

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Global Markets:

  • Asian Stock Markets : Nikkei down 0.80%, Shanghai Composite down 1.89%, Hang Seng down 5.69%, ASX down 0.96%
  • Commodities : Gold at $1736.75 (+0.86%), Silver at $17.42 (+0.33%), Brent Oil at $34.30 (-4.88%), WTI Oil at $31.86 (-6.07%)
  • Rates : US 10-year yield at 0.636, UK 10-year yield at 0.139, Germany 10-year yield at -0.511

News & Data:

  • (GBP) Retail Sales m/m -18.10% vs -15.80% expected
  • (NZD) Retail Sales q/q -0.70% vs -1.50% expected
  • (USD) Flash Manufacturing PMI 39.8 vs 39.3 expected
  • (USD) Unemployment Claims 2438K vs 2400K expected
  • (USD) Philly Fed Manufacturing Index -43.1 vs -40 expected
  • (GBP) Flash Services PMI 27.8 vs 24.1 expected
  • (GBP) Flash Manufacturing PMI 40.6 vs 35.1 expected
  • China unconcerned by US threat over HK security legislation: experts
  • BOJ Offers More Lending, No Extra Easing at Emergency Meet

Markets Update:

Asian stock markets, led by Hong Kong, are in negative territory on Friday following the overnight losses on Wall Street and on worries about rising U.S.-China tensions.

China said it plans to introduce new national security legislation in Hong Kong, raising fears of fresh protests over the city’s autonomy. In addition, China announced it will not set a GDP target for 2020, due to the uncertainty regarding the COVID-19 pandemic.

Mainland Chinese stocks declined, with the Shanghai composite down more than 1.8% while the Shenzhen component shed 2.7%. The Nikkei 225 in Japan closed 0.8% lower while the Topix index ended its trading day 0.9% lower. Hong Kong’s Hang Seng index led losses among the region’s major markets as it plummeted 5.7%, as of its final hour of trading.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 99.593 after seeing a decline this week from levels above 100. The yen brushed off the Bank of Japan’s new lending scheme to channel more money to small businesses, which mimics the U.S. Federal Reserve’s “Main Street” programme.

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