Morning 5-22

End of Hong Kong Autonomy?  Surprise Announcement overnight by China sent stocks Lower  and Bonds higher   …

China looks to tighten its control over Hong Kong. China signaled it will impose new national-security laws on Hong Kong, dealing a blow to the territory’s autonomy as Beijing seeks to stamp out widespread pro-democracy protests that have challenged leader Xi Jinping.
Hong Kong stocks tumble. Global stocks fell, with Hong Kong shares leading regional declines. The Hang Seng Index closed down 5.5% in its worst day since July 2015.(WSJ)…China Communist party for the first time in 25 years did not release a GDP Forecast (BBG)  does this indicate the forecast to gloomily to release?… Shanghai Composite Index closed 1.9% at 2813, Shenzhen Component down 2.2% and Chinext index down 2.5%. (Mizuho)   NEWS

… But Stocks have rallied back to almost unchanged, White House will not idly sit by be on Guard for anti-china tweets and tape bombs from the White House….Fitch Changed Australia’s ratings to Negative…. India Unexpectedly cut Interest rates as fears of the first negative print to GDP in 40 years looms…Chains including Starbucks, Chipotle and Shake Shack are seeking delayed or reduced rent payments for June, a sign of the financial trouble facing both restaurant operators and their landlords(WSJ)….

“A number of states reported above-trend increase in cases  yesterday, including Arizona, Delaware, Illinois, Mississippi and North Carolina, but none of the numbers were startlingly bad and it would be very premature to worry about a shift in the trends. … For the first time since the crisis began, not a single state reported cases rising by 5% or more. The median state increase in cases was 2.1%, down from 2.7% a week ago. (Politico)….

“A bipartisan group of senators reached agreement on a bill that would ease restrictions on emergency small business loans that are designed to curb massive layoffs during the Covid-19 pandemic. (Politico)…

On Moderna’s announcement of a vaccine that worked in a very small study, Dr. Anthony Fauci acknowledges the full data have not been “peer reviewed.” But he tells @NoelKing: “Having looked at the data myself, it is really quite promising.” @Morning Edition @NPR…

Trump says he won’t close the country if second wave of coronavirus hits… Trump said “we are not closing our country” if the U.S. is hit by a second wave of coronavirus infections. “People say that’s a very distinct possibility, it’s standard,” Trump said when asked about a second wave during a tour of a Ford factory in Michigan. “We are going to put out the fires. We’re not going to close the country,” Trump said. “We can put out the fires. Whether it is an ember or a flame, we are going to put it out. But we are not closing our country.” (Pro Farmer)

Markets:

 Spoos Higher now 49 handle range Nasdaq Unchanged, European Bourses mixed Mib +1.3% …Dax unchanged Bunds also Little changed…   Treasuries higher but well off session highs  The Yuan off session lows but not by much trading 7.15 Oil looking at first red day in 7 Gold and Silver back on the bid after yesterdays profit taking trade Dollar bid  +.4%  Not a surprise with Yuan Weakness

No Economic releases today So Tweets and China related comments will be the driver of Flows Opex for treasury Complex

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