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The US President Donald Trump will hold a news conference on China this Friday. This will likely include the president’s opinions on COVID-19 and China’s handling of it, trade relations, currency wars and the US administration’s political response to China’s parliament approving a decision to go forward with national security legislation for Hong Kong. This was a move that has triggered widespread concern about democratic freedoms.

So far, we know that the US has already announced that it has cancelled visas for Chinese students with ties to military schools and that it has stripped Hong Kong of its special treaty status, certifying it as no longer autonomous.

Market implications

The ramifications for financial markets could be enormous. We have already seen the value of the CNY weaken vs. the USD which will likely raise concerns that China could be weaponising its currency to support external trade.

Markets will be keeping a close eye on these developments and AUD, JPY, HKD, USD and CNH markets will all be responding in kind. This is a theme that has been brewing since the start of this week. More on all of this in the following notes from earlier this week:

  •  China’s plan of national security law in Hong Kong puts Trump in an unwelcome spot with Xi 
  •  The Hong Kong Dollar, the next black swan?
  •  Chart of the Week analysis 
  • How do experts view financial conflict of top two economies? – The Global Times