A pause in the melt-up?

Mid-week market update: Is the market about to pause in its run-up? The latest development from Hong Kong may serve as a catalyst. In the wake of the passage of the Senate bill affirming support for the Hong Kong protesters, the bill will have to be reconciled with a similar House version, where it will arrive on President Trump`s desk for signature. China has already denounced the bill as unwarranted interference in its internal affairs. There is a chance that Trump will view it as leverage in the latest round of “Phase One” negotiations. No wonder the PredictIt odds of a Trump-Xi meeting, which is a proxy for a deal, is tanking.

A more liquid contract, the offshore yuan, has also been weakening. This is another indication that the market’s expectations of a “Phase One” deal is facing.

This tweet from Chinese official media Global Times editor Hu Xijin confirmed the sudden frosty turn in the trade discussions.

Is the prospect that an unraveling trade deal enough to spook the stock market?

The full post can be found here.

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