June 14, 2019: The three things you need to know this week: Suspected attacks in the Gulf of Oman, the Contest for U.K. leadership is underway and Protests in Hong Kong
Oil Instability: Tensions appear to be rising in the Mideast following reports that two oil tankers were hit by suspected attacks in the Gulf of Oman. The location is near the entrance to the Strait of Hormuz, the strategic waterway through which nearly 20% of global oil consumption passes. Oil prices jumped with the news, countering weaker recent price activity attributed to bearish inventory data.
UK Leadership Race: Conservative MPs voted in the first round of a leadership contest to determine the successor to Prime Minister Theresa May. Boris Johnson won the first vote, followed by Jeremy Hunt, Michael Gove and Dominic Raab. Three other contenders were eliminated. Additional ballots will be cast next week to pare the list down to two MPs, who will then face a runoff vote.
Hong Kong Protests: Demonstrators blocked roads and forced the closure of the city's legislature before lawmakers could debate a controversial extradition bill. Protestors were concerned about the implications for the "one country, two systems" framework. Markets are worried the extradition law could threaten Hong Kong's standing in the business/financial community as a gateway between China and the West. The turmoil prompted a selloff in Hong Kong stocks and pushed short-term borrowing costs to the highest levels since late 2008.