The silence from China since the Donald Trump decision to support the pro-democracy protestors in Hong Kong with two pieces of US legislation is a little too eerie for me. I hope it means that getting a trade deal is more important to the Chinese than it is to have dominance over Hong Kong, free of US interference. But that’s me in Dusty Springfield mode — “just wishin’ and hope’n”.
And with our market now at record highs, I know lots of market players are wondering if they need to gear up for a sell off. If the trade deal falls over because of the Hong Kong affair, I’d expect a sizeable dumping of stocks but right now, no one of significance is predicting this and long may that remain that way.
AMP Capital’s Dr Shane Oliver is betting that Hong Kong won’t stop the trade deal. “Our assessment remains that the pressure on both sides to ease trade tensions – even if it’s just for 6-12 months – is now far more intense than has been the case over the last 18 months.”