To support the US economy against a backdrop of slowing global growth, the US Federal Reserve cut interest rates by another quarter of a percentage. The cut came despite Q3 GDP growth beating expectations at 1.9 per cent annualised, compared to forecasts of 1.6 per cent. While this was the third cut in four months, the bank announced its intention to hold off on further cuts unless the economy shows signs of weakness.
There was increasing optimism early in the week that an interim trade deal between Beijing and Washington could be signed next month. However, this was tempered towards the end of the week, following a report that Chinese officials had warned that they will not move on their key priorities and that they were concerned over President Trump’s decision making. The Chinese remain concerned about US President Donald Trump’s impulsive nature and the risk he may back out of even the limited deal both sides say they want to sign in the coming weeks.
In the UK, parliament forced Johnson to ask the EU for another Brexit extension. The EU duly agreed to a three-month extension (although the UK can leave before then if parliament agrees). By way of a consolation prize, Boris Johnson was able to secure his much sought-after general election, which is set for 12 December. It now looks like the UK will not be leaving the EU before the end of the year, and the path in the New Year will likely be determined by the outcome of the election.
Hong Kong fell into its first technical recession since the financial crisis. The economy shrank 3.2 per cent in the three months to September quarter-on-quarter, the second consecutive quarter of contraction.
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