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China still wins

Five Things - Asia
Bloomberg

Hong Kong leader Carrie Lam clings to power and China cites U.S. meddling for the upheaval. Asia equity futures are mixed after a tech-led U.S. rally. And Huawwei warn's Trumps' ban might wipe out $30 billion of sales growth. Here are some of the things people in markets are talking about today.

U.S. Meddling

Hong Kong's protests are raising questions about whether the city is governable under the "one country, two systems" framework devised before the city's return to Chinese rule 22 years ago. On Monday, China tried to regain control of the narrative: State media blamed the upheaval on U.S. meddling, while Weibo posts voicing support for the protesters were removed. The crowds called for the city's chief executive, Carrie Lam, to step down. But even if she is ousted, China still wins

Tech Leads

Asian stocks were set for a muted start Tuesday as traders bided their time ahead of this week's key Federal Reserve decision. The dollar and Treasuries were little changed. Futures in Japan and Australia were flat after the S&P 500 Index closed little changed. The Nasdaq 100 posted a modest gain as technology shares outperformed. Crude oil declined and gold also lost ground.

Blacklist Implications

Huawei founder Ren Zhengfei expects U.S. sanctions to curtail revenue by about $30 billion over the coming two years, wiping out the networking giant's growth by withholding critical American technology. Sales will probably flatline at around $100 billion. The company aims to maintain its R&D budget and refrain from layoffs or major asset sales.  

What's in a Name?

Boeing is open to dropping the maligned "Max" branding for its latest 737 jetliner, CFO Greg Smith said on the sidelines of the Paris Air Show. The company is conducting a global study of consumer and airline responses to the moniker, which has been tarnished by two fatal crashes and a three-month grounding. "We're committed to doing what we need to do," Smith said.

Most Populous

China's reign as the world's most populous country could end soon as India is projected to overtake the Asian nation by around 2027 and reach a population peak around 2060. China's population is expected to fall by 375 million by 2100. Most of Europe is also shrinking and by 2100, is expected to decrease by 120 million people, from close to 750 million today to about 630 million, according to United Nations population data.

What we've been reading

This is what's caught our eye over the last 24 hours.

And finally, here's what Cormac's interested in this morning

Australian dollar bears are salivating after a negative technical chart pattern appeared in the currency last week. A "bearish key week reversal" formed when the Aussie climbed above the previous week's high, but closed below the same period's low. It's a formation that often leads to further weakness, according to chart experts.

As a result, currency traders will be extra vigilant this week with a number of potential catalysts on the horizon. The Reserve Bank of Australia is set to publish minutes from its June 4 meeting on Tuesday, the Federal Reserve announces its rate decision Wednesday and RBA Governor Philip Lowe will speak about the labor market on Thursday. Further weakness would likely push the currency toward its January flash crash low of 67.41 U.S. cents per Aussie.

Cormac Mullen is a Cross-Asset reporter and editor for Bloomberg News in Tokyo.

 

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