Five Things You Need to Know to Start Your Day
Demonstrators set barricades during a protest in the Wan Chai district of Hong Kong, China. (Photographer: Kyle Lam/Bloomberg)

Five Things You Need to Know to Start Your Day

(Bloomberg) --

Hong Kong suffers one of the most violent days since protests started, China vows to continue opening its financial markets, and traders expect another Australian interest rate cut. Here are some of the things people in markets are talking about today. 

Petrol Bombs and Tear Gas 

It was one of Hong Kong’s most violent days since protests started more than three months ago. Police used a water cannon, rubber bullets and tear gas after protesters marched without permission on Sunday, while demonstrators set a train station entrance on fire and hurled petrol bombs in the city center. Emergency workers treated a number of injured people in the streets. The previous day thousands of people gathered to mark the fifth year since the city’s Occupy protests, at a rally that had been sanctioned by the city. Demonstrators took over roads and police said they used “minimum force” to disperse some who had charged at officers’ cordons. Meanwhile, Chinese officials are braced for more unrest on Oct. 1,  the 70th anniversary of Communist Party rule. Some frontline protesters say they’re ready to die for the pro-democracy cause.

China Opening

China said it would continue to open up its financial markets and encourage foreign investment amid reports the Trump administration is considering restrictions on fund flows to China. Bloomberg News reported on Friday the Trump administration is considering measures including delisting Chinese companies from U.S. stock exchanges, limiting Americans’ exposure to the Chinese market through government pension funds, and putting caps on the Chinese companies included in stock indexes managed by U.S. firms. The U.S. Treasury said on Saturday that the administration “is not contemplating blocking Chinese companies from listing shares on U.S. stock exchanges at this time.” As another round of high-level trade talks looms, a U.S. crackdown on capital flows would create a new pressure point in the economic dispute, and could cause disruption well beyond it.

Markets Lower

Stocks in Asia were set to start the week lower as investors weighed the latest signs of escalating trade tensions and awaited data on China’s economy. Friday’s news of possible limits on U.S. portfolio flows into the Asian nation hit exchange-traded funds focused on Chinese companies. Treasuries ended last week little changed with the 10-year yield at 1.68%. In China, it’s the final day of trading before the week-long national holiday. Financial markets and offices in Taipei will be closed Monday as Typhoon Mitag approaches.

To Cut or Not to Cut

Markets and most Australian economists expect the Reserve Bank of Australia to cut interest rates for the third time in five months on Tuesday. But the bank’s governor, Philip Lowe, is giving mixed messages. Traders see an 80% chance of the cash rate going to 0.75%, while 19 of 25 economists surveyed expect a cut. Their view is based on a cocktail of global risks, as well as rising unemployment and falling confidence at home. In a set-piece speech last week, Lowe acknowledged further cuts could well be required. But he also repeated three times that the economy is at a “gentle turning point” and likely to strengthen from here.

U.S. Whistle-blower

Congress expects to hear “very soon” from a whistle-blower whose complaint spurred an impeachment inquiry against President Donald Trump, the chairman of the House Intelligence Committee said. The process is proceeding even with Congress on recess and the timing of the whistle-blower’s appearance will depend on how quickly the security-clearance process for his or her lawyers can be completed, Democratic Representative Adam Schiff of California said in a TV interview. Trump detractors and defenders were out in force to make their case to the American people on Sunday’s political talk shows: Rudy Giuliani, Trump’s attorney, said: “This is not about getting Joe Biden in trouble, this is about proving that Donald Trump was framed by the Democrats.”

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours.

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