European bourses are looking to extend gains for a third straight session on Thursday as optimism over the reopening of economies once again overshadows rising tensions between the US and China over Hong Kong.
Last night, Washington took steps towards potentially removing the city’s special trade status. US Secretary of State Mike Pompeo said that the US no longer views Hong Kong as autonomous from mainland China. This has been the most serious response from the Trump administration over China’s crackdown on civil liberties in the financial hub.
The backdrop of cooling relations between US and China could limit gains, but we are not seeing that here is Europe at the moment. Instead, stocks are bounding higher on the expectations that consumers will be coming out of lock down with an increased desire to spend, making up for those months stuck at home. This rally does of course assume that consumers will feel financially confident to continue spending.
EC’s rescue fund