Global equity markets have continued to fall this week amid escalation of geopolitical tensions. Protests in Hong Kong reached new levels yesterday after anti-government demonstrators flooded the airport and forced its closure. The political crisis in Asia's leading financial centre has taken 10% off the value of the city's Hang Seng index this month, including a fall of 1.8% last night. 
European indices are lower this morning, albeit more moderately, while concerns over the US-China trade war encouraged the S&P 500 to fall 1.2% overnight. Last week, markets were also affected by trade tensions: the MSCI China index ended the week down 1.8%, while Wall Street fell 0.4%.  
Investor sentiment has also taken a hit from primary elections in Argentina, where the current market-friendly President suffered unexpectedly poor results. Speculation that Mauricio Macri will subsequently lose October's election sent the Argentinian peso tumbling as much as 25% against the dollar yesterday.  
Britain's economy shrank for the first time in almost seven years in the second quarter, fuelling fears that Brexit uncertainty may push the UK into a recession by the end of the year. GDP fell by 0.2% as marginal growth in the service sector was offset by contractions elsewhere, with manufacturing suffering significantly. 
The unique headwinds facing the UK, especially the threat of a no-deal Brexit, mean that bets against sterling have hit their highest level in more than two years. Yesterday, the pound hit a decade-low against the euro of €1.0724. Some good news was provided by the Office for National Statistics this morning, however. It revealed that UK wage growth has reached 3.9%, the highest rate in 11 years.  
With equity markets under severe pressure, the price of gold has risen again in the past week, whilst US Treasury yields have fallen. Oil prices, meanwhile, fell again as growth concerns affect the outlook for demand.

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