European futures are trading this Friday with falls of 1.2%. This, after the session of strong cuts in Asia – especially in the Hang Seng – after China has reported that is planning to introduce a national security law in Hong Kong. Such a move would strengthen Beijing's control over the territory, which would likely provoke protests.
Last year, pro-democracy protests were common in Hong Kong, some of which caused major disruption, so investors are now concerned that the situation may flare up again. Experts say the president is likely Trump intervene in the matter if the Chinese authorities take a firm stance on Hong Kong.
Continuing with Asia, due to the uncertainty caused by the Covid-19 emergency, the Chinese government has not issued a growth target for 2020, which has also weighed on stocks in the Far East. Tensions between the United States and China have increased lately, but this Friday China has promised to implement its trade agreement with the United States.
As for other issues, the latest macro data has drawn a picture of economic improvement in both Europe and the United States. France, Germany and the United Kingdom released their manufacturing and services PMIs for May on Thursday, and all reports showed that activity levels are still in contracting territory, but they are not as bad as the previous month. "It is encouraging to see that economic activity is moving in the right direction, but make no mistake, PMI levels are still horrible"says David Madden, an analyst at CMC Markets in London.
Otherwise, the focus of the market remains on the pandemic. United States has paid AstraZeneca up to $ 1.2 billion to secure almost a third of the first 1 billion doses planned for its vaccine experimental, while Britain announced Thursday that it would acquire more than 10 million tests for antibodies against the Roche and Abbott coronavirus.
Finally, remember that today they are published the minutes of the last meeting of the European Central Bank (ECB).
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