Rabobank: “There Are Lots Of Comparisons One Can Make To The 1930s At The Moment, None Flattering”
Yesterday’s 1 July handover day celebrations in Hong Kong did not go as smoothly at all. After rain had forced the flag-raising ceremony indoors for the first time, early clashes between police and protestors were a harbinger of what was to follow. While hundreds of thousands peacefully marched, thousands of very young protesters literally tore their way through to occupy and graffiti the Legislative Council (LegCo): they blacked out the Hong Kong symbol above Chief Executive Carrie Lam’s chair; briefly lay the British colonial flag on her desk; insisted Lam resign and the Extradition Bill be scrapped, not paused; and left a banner demanding full democracy.
This raises the stakes in all manner of ways. Lam is refusing to move on any front; the silent majority might be sympathetic to the goal but are far from happy with the recent disorder; Beijing is no doubt furious; pro-China protests and groups are already emerging on the streets too, suggesting clashes may occur at some point; and journalists who spoke with the teenagers in LegCo report many profess to be desperate enough to die for their cause. In short, the situation is far from good – for Hong Kong, for markets,…and perhaps for the HKD if one looks further out(?) Don’t forget that the US will be watching closely what happens in terms of HK’s autonomy and its legal recognition of the territory.
At the same time, Iran announced, and the IEAE confirmed, it had exceeded the 300kg uranium-enriching limit set in the 2015 nuclear deal. While Tehran can still step back from this, they are demanding Europe act on circumventing US sanctions on it forthwith to do so. That action will almost certainly trigger a sharp US reaction.
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