China releases bill for Hong Kong National Security, risk takes a fresh hit

According to a draft of the legislation seen by Reuters, China’s National People’s Congress (NPC) “proposed new legislation for Hong Kong requires the territory to quickly finish enacting national security regulations under its mini-constitution.”

However, no further details are provided on the new proposal, as all eyes remain on China’s parliamentary Vice Chairman Wang Chen, who is scheduled to give a speech explaining the new law later on Friday.

The new legislation cites that China’s parliament has powers to set up the legal framework and implementation mechanism to prevent and punish subversion, terrorism, separatism and foreign interference, “or any acts that severely endanger national security.”

Taiwan has already expressed concerns over China’s new firmer policy on Hong Kong while the same is unlikely to go down well with the US. The US has until the end of this month to decide whether to certify Hong Kong’s autonomy under the Human Rights and Democracy Act of 2019.

Meanwhile, China’s state news agency, Xinhua reported earlier today that China would review the draft national security law for Hong Kong due to “activities that have seriously challenged the bottom line” of system allowing city to govern its own affairs after handover from UK.”

“Law-based and forceful measures must be taken to prevent, stop and punish such activities,” Xinhua reported, citing the document.

Reuters is now reporting that Hong Kong activists have called for a protest march this Friday against Beijing’s plans to impose National Security legislation. 

Market reaction

The market sentiment has soured further as China taking “forceful measures’ on Hong Kong under the National Security laws are likely to deepen the ongoing US-China tensions.

The Asian stocks are flashing red, led by the 5% drop in Hong Kong’s benchmark index, the Hang Seng. The US stock futures are down nearly 0.70% while the US 10-year Treasury yields sink 4.50%.

Meanwhile, the US dollar index holds gains just above 99.50 amid increased flight to safety. Gold prices are trading flat below 1730 levels.

On the fx front, USD/JPY is testing the 107.50 support amid risk-aversion and BOJ’s additional support measures. AUD/USD is downed 0.40% to 0.6530, the weakest so far.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Editors’ Picks

EUR/USD chops around amid end-of-month flows, ahead of Trump

EUR/USD is battling 1.11, close to the two-month highs amid choppy trading. Hopes for a fiscal boost in Europe and mixed satisfactory data have supported the currency pair. , Sino-American tensions are rising and investors await President Trump's China announcement.


GBP/USD advances amid US dollar weakness, shrugging off concerns

GBP/USD is trading above 1.23, edging higher amid US dollar weakness and Britain's gradual reopening. Intensifying Sino-American tensions and the Brexit impasse are ignored. 


Cryptocurrencies: $348M in matured derivatives boost the market

Futures and options contracts' expiration brings a wave of volatility to the crypto market. Ethereum takes advantage and attacks resistances in the market dominance chart, Bitcoin goes back. Ripple disappoints despite regaining the third place in market capitalization.

Read more

Canada's economy falls by 8.2% annualized in Q1, better than expected, USD/CAD shakes

The Canadian economy squeezed by an annualized rate of 8.2% in the first quarter of 2020, better than -10% expected. Quarterly, Gross Domestic Product (GDP) squeezed by 2.1%. Most of the downfall occurred in March, with a drop of 7.2%, better than 8.5% projected. 

Read more

WTI drops 4% and eyes $32 mark amid risk-off, weakening demand

The selling pressure around WTI (July futures on Nymex) accelerates following the break below the 33 level, as bears now target the 32 support zone heading into the key US macro data and US President Donald Trump’s response to the Hong Kong issue.

Oil News