Snapshot - Strategy & economics

Janet Mui: weekly economic update 29 November

President Trump's signing of the Hong Kong Human Rights and Democracy Act has rattled markets. US data has been stronger than expected, with consumer spending a bright spot.

29/11/2019

Janet Mui

Janet Mui

Global Economist

  • President Trump signed the Hong Kong Human Rights and Democracy Act this week. In addition to calling for more democratic government in Hong Kong, the bill requires the US to annually review its trade relationship with Hong Kong.
  • There is some concern in markets this could derail US-China trade talks.
  • However, so far, China has not retaliated in any significant way. The bill had unanimous support from both the US House and Senate, putting pressure on the President to sign it. This will not have come as a surprise to the Chinese.  
  • On balance, we still expect China and the US to announce trade deal soon.
  • US data released this week exceeded economists’ forecasts. Consumer spending, which grew at an annualised rate of 2.9% in the third quarter, remains a bright spot.
  • We think the Fed remains on hold for now.

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