Morning 11-20

• U.S. Senate passed legislation supporting Hong Kong Protestors this will upset China and Could Impact trade negotiations. House needs to vote on it and President Trump could still Veto it but for now markets take as a slight negative for trade talks.
• Global Times twitter: The US has turned HK into the focus of China-US competition. It is all the people in Hong Kong, including foreigners and foreign companies that suffer. The mainland only feels limited pain. Beijing has no reason to back off on issue of sovereignty, and let HK be at US’ disposal
• From the Global Times “Few Chinese believe that China and the US can reach a deal soon. Given current poor China policy of the US, people tend to believe the significance of a trade deal, if reached, will be limited. China wants a deal but is prepared for the worst-case scenario, a prolonged trade war”

• A positive Piece of news China’s banks cut their 1y & 5y bank loan rates by 5bps to 4.15% & 4.8% respectfully; this comes after PBOC lowered rates on Monday.

• Target Earning Much better than Expected on Strong sales and raised full year guidance Stock +12%. After yesterday’s disappointment from Kohl’s retailers are back!
2s10 Yield Curve flatter for 5th consecutive day, Flatter yield curve= Risk off=Worries about trade=Reflation trade slowing, this has erased almost all the MTD steepening. Spoos – 7 handles, UK FTSE -1%,Dax -.6%,German PPi 3 year lows reported this morning, NKY closed down .6% Bunds +40 ticks yield lowest in 2 weeks, Crude +.5% even though Weekly API storage numbers were bearish. Nat Gas small bid as this morning’s Weather forecast A bit colder
Economic Calendar Quiet

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