Some Hongkongers have said that they will temporarily halt protests out of respect for the victims of the 9/11 terror attack. The move came after a Chinese state-run paper accused “radical protesters” of planning local acts of terrorism on Wednesday – the anniversary of the 2001 attacks on the US.
On Monday, the China Daily Hong Kong edition wrote in a Facebook post that the claim was based on “leaked information” in online chat rooms, attaching a picture of the World Trade Centre under attack. “Anti-government fanatics are planning massive terror attacks, including blowing up gas pipes, in Hong Kong on September 11,” read the post.
The charming CCP at work. But protests are suspended.
Third, Brexit was all over the place but most important was this, via Reuters:
While parliament has so far blocked two of Johnson’s requests for an election, Farage said it was clear that there would be one soon and that traditional party loyalties to Conservative and Labour had changed due to Brexit.
“If we go beyond the 31st of October and we are still a member of the European Union – which looks increasingly likely – then a lot of votes will shift from the Conservative Party to the Brexit Party,” Farage told reporters.
He said he would consider a pact with Johnson’s Conservatives ahead of a possible general election if Johnson agreed to press for a “clean break” Brexit.
“The Conservatives will take a real kicking from Nov. 1 onwards,” Farage added. “I very much hope that Boris Johnson will simply look at the numbers. If we stand against them, they cannot win a majority.”
Johnson’s political spokesman said: “The PM will not be doing a deal with Nigel Farage.”
Not now. But after any election he sure will:
Fourth, oil was down sharply on Iran detente, via Bloomberg:
Bolton made sure to block any and all avenues for diplomacy w/ Iran, including a plan being brokered by Macron,” Suzanne DiMaggio, a senior fellow at the Carnegie Endowment for International Peace, said on Twitter.
“The French are offering Trump a facing-saving way out of a mess of his creation. He should grab it.”
Falling oil helped bonds and stocks.
JPM sees the possibility of a ripping rally in the short term:
…positive fundamental developments related to Brexit, Italy, Hong Kong, US economic activity (services), and most importantly negotiations between the US and China that are scheduled for October.
…given the increased monetary stimulus, providing support for the market and value stocks…the October negotiations will be the key for future performance of equity markets and more broadly the global economy.
…recent voter polls indicate that 65% of US voters would blame US administration trade policies and Trump directly for market volatility, and 57% would blame Trump if the US were to enter recession.
These results were confirmed with another poll yesterday indicating similar results. A recession going into election would be politically devastating, and with the time window to the election closing, it would be reasonable to expect some progress on trade. This could give enough time for monetary and fiscal measures to turn around economic activity.
…the value rotation can continue and the broad market could move higher going into October negotiations, and if real progress is made, continue into a more sustained rally.
This view is based on positioning, record factor spreads (e.g., value vs low volatility), and an unwind of some of the August technical flows in both rates and equities.
There isn’t much fiscal support. Monetary support is building even if it has stalled in China. It’s mostly going to impact stocks anyway so what this argument really amounts to is stocks will go up on a monetary thermal and that will support economic activity in the short term via the wealth effect.
While this hope abides, the Australian dollar will rise.