Finance and geopolitics in a double twitch

Summer was not only hot weather-wise, it was also hot on the stock markets where Donald Trump’s candid tweets, the big unknown of the negative rates and the geopolitical vicissitudes are jostling.

Hong Kong especially where a complex political crisis could increase the risk of a global economic downturn while China is perhaps playing, over there, its ambition to become the world’s leading power by 2050. From tensions on Iran’s nuclear program to Europe-USA relations to the Argentine tumble, more than ever geopolitics is at the heart of macroeconomic considerations.

According to Cyceon, the ongoing crisis in Hong Kong is of paramount importance considering its potential triple effect. First, US President Donald Trump has included the crisis’ management by his Chinese counterpart Xi Jinping into his negotiating elements of the trade agreement that they are slow to complete.

Then, the long-term stake is major for the Chinese Communist Party as the whole world, and especially its Asian neighbors, scrutinize each of its actions that could decide whether China will catch the United States to the rank of superpower. Finally, this crisis comes in a context of economic slowdown that Beijing is working to transform into a new “normal”.