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President Trump Signs off on Hong Kong Bill | US Thanksgiving Drains Market Liquidity

Published November 28, 2019
  • President Trump has signed two bills backing Hong Kong protesters, and stated he “signed these bills out of respect for President Xi, China, and the people of Hong Kong.”  Trump signed the bills amidst US-China trade negotiations, and the market has concerns that these bills could set back trade talks.  The response from China has been one of anger, and the foreign ministry has commented that the bills will be met with strong countermeasures.
  • With US traders’ home for Thanksgiving, markets are expected to be relatively quiet for the rest of the week.  During the next two days, liquidity will be much thinner than usual and may result in more choppy price movements across FX markets.
  • Bloomberg is reporting that ECB policymakers may be looking to reset their inflation target to 2% in their next strategy review.  While most central banks aim for a set 2% target, the ECB has had a mandate of “below, but close to 2%”.  The change would allow the ECB to continue monetary stimulus right up until they see a consistent 2% inflation reading.  This may be useful when the economy picks up, but it remains to be seen how this would have any impact on their current economic slowdown.

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