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China trade data, the Fed, currencies and oil in focus

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Stocks in Asia were set to trade lower on Friday. Meanwhile, the Dow Jones Industrial Average posted a record close on Wall Street.

Futures pointed to a lower open for shares in Japan, with the Nikkei futures contract in Chicago at 21,595, as compared to the Nikkei 225’s last close at 21,643.53.

Stocks in Australia were also poised to slip, with the SPI futures contract at 6,628.0, as compared to the S&P/ASX 200’s last close at 6,716.10.

Investors will be looking out for the release of Chinese trade data for June to assess the impact of Beijing’s ongoing trade war with Washington.

Advance gross domestic product data for the second quarter in Singapore is also set to come out at 8:00 a.m. HK/SIN.

Asia-Pacific Market Indexes Chart

Overnight on Wall Street, the 30-stock Dow crossed the 27,000 for the first time in history, adding 227.88 points to close at 27,088.08. The S&P 500 also posted a record close, rising 0.2% to 2,999.91. The Nasdaq Composite, on the other hand, slipped 0.1% to finish its trading day stateside at 8,196.04.

The moves came amid rising expectations that the U.S. Federal Reserve would cut interest rates at its upcoming monetary policy meeting in July. Market expectations for a rate cut later this month are at 100%, according to the CME Group’s FedWatch tool.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.050 after bouncing from levels below 96.9 yesterday.

The Japanese yen traded at 108.48 against the dollar after weakening from levels below 108.0 in the previous session, while the Australian dollar changed hands at $0.6973 after trading below $0.695 earlier in the week.

— CNBC’s Fred Imbert contributed to this report.

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Hong Kong protesters trample Chinese flag, set fires

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Pro-democracy protesters desecrate the Chinese national flag during a protest at the New Town Plaza shopping mall in Hong Kong’s Sha Tin district on September 22, 2019.

ISAAC LAWRENCE | AFP | Getty Images

Protesters in Hong Kong trampled a Chinese flag, vandalized a subway station and set a fire across a wide street on Sunday, as pro-democracy demonstrations took a violent turn once again.

The day’s action began peacefully, as protesters filled a shopping mall and, in a new twist, folded paper “origami” cranes that they tied onto a large rigging that they assembled in the mall in the Shatin district.

Some put a Chinese flag on the floor and took turns running over it, before defacing it and putting it in a dumpster outside, which they then pushed into a nearby river.

One group later attacked the Shatin subway station, which is connected to the mall. They jumped up to smash overhead surveillance cameras, used hammers to knock ticket sensors off gates and spray-painted and broke the screens of ticket machines, using umbrellas to shield their identities.

Riot police arrived following the attack and guarded the station after it was closed, with a metal grill pulled down to block entry.

Protesters then built a barricade across a street near the mall, piled what appeared to be brown palm fronds on top and set them on fire.

Police fired tear gas as they tried to advance on the protesters, who had retreated before taking a position behind a wall of umbrellas that those in the front held.

Hong Kong’s pro-democracy protests, now in their fourth month, have often descended into violence late in the day and at night. A hardcore group of protesters says the extreme actions are needed to get the government’s attention. On Saturday night, police used tear gas and rubber rounds against protesters who threw gasoline bombs toward them and set fires in streets.

Before making the origami cranes, protesters at the Shatin New Town Plaza mall chanted slogans and sang a song that has become their anthem, backed by a small group playing on woodwind and brass instruments through their masks. Many lined the balustrades of the three higher floors overlooking where others gathered in the wide space below.

Hong Kong’s leader, Chief Executive Carrie Lam, has agreed to withdraw an extradition bill that sparked the protests in June. But the anti-government protesters are pressing other demands, including fully democratic elections in the semiautonomous Chinese territory and an independent investigation of complaints about police violence during earlier demonstrations.

Protesters say Beijing and Lam’s government are eroding the “high degree of autonomy” and Western-style civil liberties promised to the former British colony when it was returned to China in 1997.

The unending protests are an embarrassment for China’s Communist Party ahead of Oct. 1 celebrations of its 70th anniversary in power. Hong Kong’s government has canceled a fireworks display that day, citing concern for public safety.

Transit authorities closed two stations on the airport express train to guard against a possible disruption of transportation to the transportation hub, but none had materialized by late Sunday afternoon.

The Hong Kong International Airport Authority said the train would operate between the airport and the terminus station in the center of the city, without making its usual stops in between. Some airport bus routes were also suspended. Passengers were advised to leave sufficient time to reach the airport.

Passengers boarding the train were told via onboard announcements that it would make fewer stops than usual, with no mention of the protests. Orange tape blocked the turnstiles at the empty Kowloon station, and police clutching riot helmets greeted arriving passengers at the Hong Kong terminus.

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Trump heads to UN with long list of deals he’s yet to close

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US President Donald Trump gestures to supporters as he arrives for a campaign rally in Rio Rancho, New Mexico, on September 16, 2019.

Nicholas Kamm | AFP | Getty Images

President Donald Trump, a self-described deal-maker, is saddled with a long list of unresolved foreign policy deals he has yet to close heading into his U.N. visit this coming week.

There are challenges with Iran, North Korea, the Afghan Taliban, Israel and the Palestinians — not to mention a number of trade pacts. Some are inching forward. Some have stalled.

Trump has said repeatedly that he is in “no rush” to wrap up the deals. But negotiations take time. He is nearly three years into his presidency and the 2020 election looms, which will crimp his ability to tend to unfinished foreign business.

“I don’t blame the president for having so many deals open,” said Nicholas Burns, a former undersecretary of state who has worked for Republican and Democratic presidents. He gives Trump credit for going after China on its trade practices and talking to the Taliban to try to end 18 years of war in Afghanistan.

“But I do think you have to be tough-minded as citizens and grade him,” Burns said. “How’s he doing? Well, in my book, he doesn’t have a single major foreign policy achievement in more than 2½ years in office.”

Trump’s critics say that lack of success means the president is going to the United Nations in a weakened position.

Some foreign policy experts give Trump credit for opening up international negotiations. Yet there is plentiful criticism of his brash negotiating style — blasting foreign leaders one day, making nice the next — because they think it makes the global chessboard more wobbly.

In his defense, Trump says: “It’s the way I negotiate. It’s done very well for me over the years, and it’s doing even better for the country.”

Trump’s “America first” mantra hasn’t gone over well at the United Nations before. Now, as tensions escalate between the U.S. and Iran, the president needs international support to help put pressure on Tehran.

Ever since Trump pulled the U.S. from the Iran nuclear deal and reinstated crippling economic sanctions, Iran has lashed out. Iran downed an American drone, has impounded ships in the Persian Gulf and is being blamed for the attack on Saudi Arabia’s oil facilities.

“He’s argued in the past that each country should act solely in its own interest, and he’s argued that American might, combined with his negotiating skill, would build U.S. power,” said Jon Alterman, Middle East program director at the Center for Strategic and International Studies. “Now we have a General Assembly meeting where the president really needs allies on Iran.”

The prospect of Trump talking with Iranian President Hassan Rouhani on the sidelines of the U.N. General Assembly has evaporated.

Alterman said the best-case scenario of another negotiation with Iran would be one leading to the end of Tehran’s destabilizing activities in the Mideast, new limits on its nuclear program and greater visibility into its missile program. The worst-case scenario, he said, is that the president alienates his allies and Iran carries out more attacks on U.S. interests and allies.

Former Secretary of State Rex Tillerson, who was fired by Trump, told a group at Harvard University recently that successful negotiations occur when both parties leave with an acceptable outcome. In a comment seemingly aimed at Trump, Tillerson said: “If you ever think about a negotiation as a win/lose, you’re going to have a terrible experience, you’re going to be very dissatisfied, and not very many people are going to want to deal with you.”

Trump’s other disarmament talks — with North Korea — have hit a wall, too.

Trump’s initial summit with North Korean leader Kim Jong Un in Singapore was a first, as was Trump’s historic step inside North Korea at the Demilitarized Zone dividing North and South Korea.

Still, the U.S. and North Korea have failed to gain traction on nuclear talks. Negotiations to get Kim to give up his nuclear weapons have been stalled since a February summit in Hanoi, which collapsed over disagreement about sanctions relief in exchange for disarmament measures.

President Donald Trump shakes hands with North Korean leader Kim Jong Un as they meet at the demilitarized zone separating the two Koreas, in Panmunjom, South Korea, June 30, 2019.

KCNA via Reuters

On Friday, Trump claimed that his three-year relationship with Kim is the “best thing that’s happened” to the United States.

“We’ll see what happens,” Trump added. “It might work out. It might not work out.” But Trump stressed that since they started talking, Kim has not conducted nuclear tests and has only fired short-range, not long-range missiles.

Trump’s Mideast peace negotiations also have no momentum.

The administration’s long-awaited peace plan, developed by Trump son-in-law and adviser Jared Kushner, has not come out and the path forward is unclear.

Tentative plans to release the proposal had been scrapped at least twice. The plan already is facing rejection by the Palestinians, who cut off ties with the administration after Trump recognized Jerusalem as Israel’s capital. The Palestinians have accused his administration of losing its standing as an honest broker by repeatedly siding with Israel.

And then there is the long-running conflict in Afghanistan.

While Trump has public backing to end the war, he just cut off nearly a year of U.S. talks with the Taliban. He said the Taliban were ramping up violence to gain leverage in the negotiations.

“They made a mistake,” Trump said Friday. “I was totally willing to have a meeting.”

Trump has the public’s support for withdrawing U.S. troops, but he was harshly criticized for planning to host the Taliban at the Camp David presidential retreat just before the anniversary of the Sept. 11 attacks. The Taliban were harboring al-Qaida when al-Qaida orchestrated 9/11.

Trump biographer Michael D’Antonio said that where international affairs are concerned, the president appears more interested having something showy to announce than in long-term problem-solving.

“Once he has a partner engaged, he’ll likely announce something that sounds important,” D’Antonio said. “Others will clean up the details after the election.”

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‘Entirely implausible’ to say Houthis behind Saudi oil attack: UK FM

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Houthi supporters hold up rifles as they rally to protest the killing of Saleh al-Samad, a senior Houthi official, by a Saudi-led coalition air strike in Hodeidah, Yemen April 25, 2018.

Abduljabbar Zeyad | Reuters

British foreign minister Dominic Raab said it was implausible that attacks on Saudi oil facilities were conducted by Yemen’s Houthi movement, adding that Saudi Arabia had the right to defend itself against any further strikes.

“I find it, from the information I have seen, I find it entirely implausible and lacking in credibility to suggest that those attacks came from Houthi rebels,” Raab told the BBC, but he declined to say to whom Britain attributed the attacks.

“Before we attribute responsibility I want to be absolutely crystal clear, because that will mean the action that we take can be as robust and as widely supported as possible.”

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