American President Donald Trump last week ratified two bills approved by Congress and concerned the defence of the protection of the Hong-Kong demonstrators.
These bills, among others, stipulate sanctions against Chinese officials who are involved or will be involved in human rights violations. In addition, reference is made to the imposition of restrictions on the export of goods relating to the police and which certain goods are used by Hong-Kong police officers.
by Thanos S. Chonthrogiannis
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China’s reaction was to accuse the U.S. of interfering in its internal affairs, setting a “severe retaliation” issue in response to the US, which has thrown oil into the fire of investor concern for further escalation of US-China trade war.
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The bonds of the US and German federal governments respectively managed to sustain part of their recent earnings during the month of November. The yield of the ten-year-benchmark US government bond reached 1.76% (-0.364%, the corresponding German counterpart’s bond yield) about 20b.p. lower of the high three months recorded in early November.
Last week, the news about the US economy was positive since the annual GDP growth rate for Q32019 was announced at 2.1% instead of 1.9%-initial estimate-versus 2.0% and 3.1% for Q22019 and Q12019 respectively.
This data increases the likelihood that interest rates may not be reduced by the FED in the next few months, by giving the most likely scenario the maintenance of unchanged interest rates.
This is based on economic data, unless a political decision is taken by President Trump to impose even lower interest rates to further increase the positive performance of the US economy for next year and to better address China in the trade war between them.
So, these financial figures announced last week created a positive climate for the dollar, with the parity of €/$ being found at 1.0990 before moving to the 1.1000 region in the next few days.
But the euro-€ closed in November with 0.2% lower on a weekly basis in the markets of Europe, without the € to benefit from the strongest of the expected euro area inflation figures for the month of November.
