5 things to start your day

[Bloomberg]( Beijing sanctions on America avoid trade, Trump declines to participate in impeachment hearing, and there’s a lot to watch in European politics. Reaction China’s first retaliation to the U.S. bill supporting pro-democracy movements in Hong Kong has avoided any measures related to trade. A Foreign Ministry spokeswoman said sanctions would be put on [U.S. human-rights organizations operating in the city](, while Hong Kong port visits by U.S. Navy ships would be suspended. The statement promised that China would take “further necessary actions” without signaling what they might be. Meanwhile, the world’s second-largest economy may be on the road to stronger output after the[Caixin manufacturing index rose to 51.8](. Trump says no Through his lawyer, President Donald Trump said that [he will not take part in the House Judiciary Committee panel’s first impeachment hearing on Wednesday](, while keeping open the option to be represented at future sessions. Pat Cipollone, counsel to the president, said the entire process has been unfair to Trump. This week’s hearings will give Democrats the chance to turn weeks of testimony [into a narrative to win over voters](, while allowing Republicans to defend the president. Trump, meanwhile, is [travelling to London]( for a NATO Summit. Sponsor Content by PIMCO U.K. Elections: What’s Next for Economy and Markets? The U.K. is set to head to the polls on December 12. Here are our key takeaways for the economy and markets. [Read more.](  European politics There were more signs that German Chancellor Angela Merkel’s ruling coalition could be entering its final days over the weekend when the Social Democrats picked government critics Norbert Walter-Borjans and Saskia Esken as new party leaders. Merkel’s CDU party said there would be [no renegotiation of the terms of their alliance](, adding the SPD can quit government if they can’t accept that. In the U.K. campaigning for the [Dec. 12 election]( focuses on security after last week’s [terror attack in London]( that left two victims dead. Markets rise The positive manufacturing data from China, coupled with [better-than-forecast European numbers](, is giving stocks a lift. Overnight, the MSCI Asia Pacific Index rose 0.5% while Japan’s Topix index closed 0.9% higher. In Europe, the Stoxx 600 Index was 0.4% higher at 5:50 a.m. Eastern Time with miners and oil companies among the best performers. S&P 500 futures pointed to [a gain at the open](, the 10-year Treasury yield was at 1.848% and gold was lower. Coming up... New European Central Bank President Christine Lagarde [faces European lawmakers today]( with her plans for a reassessment of the institution’s mission likely to play a prominent role when questioning begins at 9:00 a.m. Markit November manufacturing PMI is at 9:45 a.m., with ISM manufacturing and October construction spending at 10:00 a.m. After a record Black Friday for online sales, today is Cyber Monday with [sales expected to increase 19%]( over last year. What we've been reading This is what's caught our eye over the weekend. - Odd Lots: How bond defaults are [changing China’s market](. - The way out for a world economy [hooked on debt](? More debt. - Hong Kong retail sales [slump by almost 25%](. - OPEC+ gambles that [U.S. shale’s golden age]( is over. - JPMorgan sees [global economic pick-up]( spurring mediocre returns. - The billionaire hedge fund manager with [quantum ambitions](. - The [biological basis]( for economic behavior. And finally, here’s what Joe's interested in this morning The big action this morning is happening in the bond market, with rates on government debt jumping all around the world. One contributing factor may be a surprise jolt to German domestic politics. Over the weekend, the junior member of Germany's governing coalition (the SPD) changed its leadership, and [the new party chief wants to challenge Merkel's commitment to balanced budgets](. I have two thoughts on this, one micro and one macro. The micro one is that nothing is likely to change in terms of the German fiscal stance anytime soon. Everyone will say this, and they're probably right. However, everything in markets happens at the margin. So for German government bonds still trading in negative territory, you don't need a major change in the distribution of different future economic outcomes to induce a move. Just a slight improvement in the odds of reflationary fiscal policy could shift markets. The bigger, more macro thing here is that all around the world we're seeing a rethink of the role of fiscal policy as a driver of economic stabilization. Read [Enda Curran on this](. After years and years of frustratingly slow growth, and rates near zero and growing conventional wisdom that monetary policy is "pushing on a string" the intellectual and political dial is starting to turn towards the view that more government spending and more government debt is not necessarily so bad. So going back to Germany, while the impact of a leadership change in a minority party may not exactly be a game changer, it can be seen as part of a huge (but slow moving) global rethink of fiscal policy. And eventually if and when that dam breaks, the implications could be huge. Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. [Learn more](. [FOLLOW US [Facebook Share]]( [Twitter Share]( [SEND TO A FRIEND [Share with a friend]]( You received this message because you are subscribed to Bloomberg's Five Things newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( Bloomberg L.P. 731 Lexington, New York, NY, 10022