European shares added to recent gains and base metals in London traded higher as easing lockdown restrictions and fiscal support fuelled risk positive trading. The US session started in a similarly positive way. However with an hour to go, the White House foreshadowed an announcement on Hong Kong tonight, raising concerns about tension between China and the US. A surge in new Covid-19 infections in South Korea spurred the re-introduction of some containment measures, further undermining market sentiment.

Bonds rallied, and gold lifted, before the White House news, indicating a significant number of investors remain highly cautious. China and the US are now contesting a number of fronts, including the status of Hong Kong, the origins of the Covid-19 virus, and Chinese buying of US goods. Any escalation of the dispute into economic sanctions could derail recovery in the battered global economy.

Analysts fear the US may remove Hong Kong’s special trading status after the National People’s Congress approved new security laws. This would almost certainly provoke a response from Beijing. President Trump did not give a time for tonight’s speech.

US tech stocks come under pressure after President Trump accused Twitter of censorship. The irony is that he used a tweet to do so. Fear that he may act against the likes of Twitter and Facebook defies logic. Twitter didn’t censor anything the President wrote, he cannot alter law without Congressional support, and it’s unlikely the President would derail the share prices of the stocks that are buoying the US share market.

A mixed day awaits Asia Pacific traders. Stock futures in Japan, Singapore and Australia point to opening falls. Hang Seng share futures finished the overnight session higher, but stopped trading before the President’s agenda was announced. Yesterday’s stronger fixing of the yuan eased concern that the People’s Bank of China would weaponise the currency, but today’s fix will be watched just as closely.

CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.