Markets' focus is whether Hong Kong bill damages trade talks - UBS

"US President Trump signed the Hong Kong Human Rights and Democracy Act into law. This was expected," notes UBS Global Chief Economist Paul Donovan.

Key quotes

"Markets' focus is whether this damages trade talks. China has threatened "resolute countermeasures" without defining what "resolute countermeasures" might be."

"With the legislation now law, the US administration has flexibility as in implementation. Nonetheless, this is a flaw in US President Trump's negotiating style. Like the Grand Old Duke of York, a crisis is marched to the top of the hill in order that the president can march it back down again and claim a victory. This legislation is an unexpected obstacle on the way back down."