Opening Bell: U.S. Futures Drift On Mixed China Signals; German Steel Giant Sinks

 | Nov 21, 2019 04:18AM ET

  • U.S. futures slip as U.S.-China Hong Kong tensions reach new heights
  • European shares drop as steel giant Thyssenkrupp raises red flags
  • Yuan strengthens mildly, suggesting trade deal hopes are still alive
  • Gold, yen and Treasurys pare gains
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Futures on the S&P 500, Dow and NASDAQ 100 declined this morning but managed to contain losses, as the diplomatic spat between the world’s two largest economies over Hong Kong matters threatened to turn into a crisis.

U.S. President Donald Trump is expected to sign legislation backing Hong Kong protesters, potentially setting up further confrontation with China after Wednesday's controversy . For its part, the Chinese government has stepped up its warnings against U.S. legislation on the issue, with the Communist Party's daily paper stating that in case of further interference, "the Chinese side will inevitably adopt forceful measures to take resolute revenge, and all consequences will be borne by the United States."

Meanwhile, however, news that China has invited high-level U.S. trade officials for a new round of face-to-face talks in Beijing struck a more positive note, helping equities trim some losses.

Europe's STOXX 600 slipped more markedly lower, dragged down by German steel multinational Thyssenkrupp's (DE:TKAG) shares, which plunged after the group announced it was suspending dividend payments and warned of deepening losses.

In the early Asian session, regional indices hit the lowest price in almost three months on an intraday basis, but downward pressure eased later after Chinese Vice President Liu He said he was “cautiously optimistic” about reaching a phase-one trade deal with the U.S.