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A multi-billion dollar bid to create a global trading power, a Hong Kong activist abroad and the prospect of the U.S. easing sanctions on Iran. Here are some of the things people in markets are talking about today. 

Exchange Bid 

Hong Kong Exchanges & Clearing’s surprise $36.6 billion bid for London Stock Exchange Group faces serious political hurdles, and may even spark a bidding war, market participants say. LSE shares jumped 16% on Wednesday following the announcement before gains pared to about 5% in the early afternoon, reflecting skepticism that a deal can be done in the face of unrest in Hong Kong and potential concern over Chinese ownership. For HKEX, the bet on London promises a base away from the increasingly fraught political climate at home. An HKEX-LSE pact would create a global trading power that would have stock, derivatives and commodities exchanges, as well as clearinghouses across two continents.

Easing Up on Iran

Trump discussed easing sanctions on Iran to help secure a meeting with Iranian President Hassan Rouhani later this month, prompting then-National Security Advisor John Bolton to argue forcefully against such a step, according to three people familiar with the matter. The White House has started preparations for Trump to meet with Rouhani on the sidelines of the annual United Nations General Assembly in New York during the week of Sept. 23, although it’s far from clear if the Iranians would agree to talks while tough American sanctions remain in place. Trump sitting down with Iranian leaders — should it actually happen — would break more than four decades of U.S. policy. Bolton’s ouster on Tuesday improves the odds of a meeting.

China Lashes Germany

Hong Kong activist Joshua Wong is in Germany to win support for the city’s protesters, but the welcome he received from the country’s politicians and media sparked a rare rebuke from the Chinese ambassador in Berlin. “Regretfully, some German politicians have received such an instigator of violent acts,” Wu Ken told journalists. “Because they lack the fundamental knowledge of the situation in Hong Kong, I have to assume they want to win political capital from this.” It was an unusual admonishment from a foreign diplomat on German soil, coming just days after Chancellor Angela Merkel made a two-day trip to China where she advocated for the peaceful resolution of the months-long crisis.

Market Open

Asian shares looked set to follow an advance on Wall Street where stocks reached the highest since July. The dollar rose and Treasuries were little changed. U.S. stocks rallied as the rotation from momentum to value shares that began at the start of the week slowed. Crude oil plunged after Trump indicated that sanctions on Iran could be eased. The president earlier urged the Federal Reserve to cut interest rates to “zero, or less,” in a tweet, while China moved to lessen the trade war’s repercussions by announcing a range of U.S. goods to be exempted from 25% extra tariffs put in place last year.

World-Beating Tech 

For decades, China’s tech sector has been seen as a clone factory, copying other countries’ innovations. But a wave of Chinese startups are dismantling that copycat image, creating world-beating headphones, cameras and drones. U.S. President Donald Trump’s campaign to contain China’s rise is spurring companies like Insta360, SIVGA, Huami and DJI Technology to accelerate design and invention. The threat they pose is one of unmatchable geography: By bringing design expertise and innovation to the place where devices are manufactured, these companies are able to develop products faster and more cheaply. Chinese corporations now rank among the world’s most prolific patent applicants.

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours.

  • Trump wants negative rates. The Fed doesn’t. 
  • Having a world-beating currency can be a major headache. 
  • Here’s the full scale of the damage a no-deal Brexit could cause.
  • A tiny Pacific nation makes a go of its own cryptocurrency.
  • Filipinos dropping out of the workforce could be good for the economy.
  • China is struggling to halt a $24 billion online casino boom.
  • Wheat whiskey is a spirit worth experimenting with. 

To contact the author of this story: Alyssa McDonald in Sydney at amcdonald61@bloomberg.net

To contact the editor responsible for this story: Alex Millson at amillson@bloomberg.net

©2019 Bloomberg L.P.