Hong Kong risks continue to rise

Crackdown from China coming?

Videos are doing the rounds of Chinese police assembling in Shenzhen in what are official large-scale exercises. However the city is directly adjacent to Hong Kong so they look more like preparations that exercises.

Hu Xijin of the Global Times says it’s probably a warning.

“I think it is a clear warning to rioters in Hong Kong. Possibility of Beijing intervening in Hong Kong’s situation is rising,” he wrote on twitter.

An armed intervention would spark some dramatic moves in markets, I expect. I’m sure at least part of the risk trade today is in response to the situation in Hong Kong. The US essentially ok’ed a move by today saying that it’s a situation between China and Hong Kong.

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