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  • Trade sentiment remains subdued as Hong Kong protests dim optimism surrounding the US-China phase one deal.
  • Bangkok meeting between the US and China’s defence personnel, the US-Iran tension adds to the markets geopolitical tension.

Despite the US and Chinese media flashing trade positive statements off-late, Asian stocks stay subdued. The reason could be attributed to geopolitical tension surrounding Hong Kong, Taiwan and Iran, not to forget a lack of major data/events.

During the weekend, US President Donald Trump joined hands with top-tier diplomats to convey optimism regarding phase one trade deal with China. The same was recently followed by Global Times headlines relying on the Chinese Vice Premier Liu He’s updates after the meeting.

However, both the economies continue to remain at loggerheads when it comes to their defence personnel’s meeting in Bangkok. China’s Defence Minister Wei Fenghe and the United States (US) Defence Secretary Mark Esper discussed the importance of military relations for the US-China ties. The former couldn’t refrain from threat to the US Defence Secretary when it came to issues like Taiwan while also pressing over Hong Kong violence. Elsewhere, Reuters relied on an anonymous Trump administration official to that the US is monitoring events in Hong Kong, and condemns “unjustified use of force.”

With this, Asian share markets stay sluggish with the MSCI’s index of Asia Pacific shares flashing 0.5% gains but stocks from Australia, New Zealand, Korea and Indonesia marking smaller profits by the press time. Further, Chinese benchmarks remain overall in profits while India’s BSE SENSEX seesaws near a no-change mark. Additionally, the US 10-year Treasury yields also remain unchanged to 1.82% while S&P 500 Futures mark a few points down to 3,117 by the time of writing.

Although trade/political headlines are likely to dominate near-term market moves, comments from the European Central Bank (ECB) policymakers, German Buba Monthly Report and the US NAHB Housing Market Index for November will decorate the economic calendar.