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  • Risk-on markets on a knife’s edge and Hong Kong is an underestimated threat.
  • Hong Kong activist Joshua Wong  was arrested at 7:30 this morning.

There is news that Hong Kong activist Joshua Wong  was arrested at 7:30 this morning en route to South Horizons MTR station, when he was suddenly pushed into a private car on the street. He was escorted to police HQ in Wan Chai on three charges, according to reports.  

FX implications:

Hong Kong is an underestimated risk to markets. Just as there seems to be some solace from risk positive trade  headlines from both sides of the fray, any escalation on the protests could provoke international intervention and the immediate focus would be the implications for neighbouring nation’s markets such as  Japan, Singapore, and of course China which would likely follow the Hong Kong market. The yen would be a major focus   – But, there are negative ramifications for any  trade progress that might be made between the US and China.  

Beijing has already accused western countries, in particular, the US, for instigating the protests and indeed,  US lawmakers and officials have issued statements of support for the protests. Trump  warned China that carrying out a Tiananmen Square-style crackdown on Hong Kong pro-democracy protesters would harm trade talks between the two countries.