If hopes for an agreement between the US and China to resolve the trade conflict were already dim by the news that has emerged about the difficulty of negotiations over tariffs, optimism was seriously damaged yesterday after the US Senate passed a law to support Hong Kong’s independence from China, which means indirectly supporting protestors who have expressed their opposition on the streets of the Asian city. The approved measure has led analysts to point out that it is now very difficult for ‘phase one’ of the deal to be signed in 2019. Given the hostility over the political act in the US Congress, there is even doubt that an understanding can be reached in the short term or mid-term.
Photo by Chilam Siu.
But regardless of the risks and some demands for safe haven assets that took place on Wednesday’s session, investors still do not seem to attach much importance to the consequences of non-resolution of the conflict. Therefore, the dominant sentiment remains to support the US indices near or to a new historical high. From the FED minutes nothing new until early December, Non-Farm payrolls and few other economic events are likely to break the trend, so Wall Street’s movement continues to be constrained by what happens on this topic. It is also necessary to incorporate the fact that there are only three more weeks of full volume this year before the Christmas holidays.
