Asian markets extend global slide

Paterniano Del Favero
Agosto 13, 2017

Trump's comments came after a Washington Post report (https://www.washingtonpost.com/world/national-security/north-korea-now-making-missile-ready-nuclear-weapons-us-analysts-say/2017/08/08/e14b882a-7b6b-11e7-9d08-b79f191668ed_story.html?utm_term=.0938becb046e) that North Korea has built a miniaturized nuclear warhead.

The North Korea situation isn't the only thing weighing on stocks.

In overseas trading, stock markets across the Asia-Pacific region saw continued weakness during trading on Friday.

Japanese markets were closed for a holiday but the tense mood dragged Asian shares lower and an MSCI index of stocks across the globe was on track to post its largest weekly drop since the week before Donald Trump won the USA presidential election in November.

Investors kept a wary eye on escalating tensions between the US and North Korea.

A statement from the North Korean military called President Donald Trump's warning that the communist nation would face "fire and fury" if it continued its provocations a "load of nonsense".

"We would now be careful with a whiff of risk aversion in the air and, by extension, also stay away from shorts in the rates market", RBC's global macro strategist Peter Schaffrik said.

But the yen added to an already-strong weekly rally of close to 1.5 percent, hitting its highest in nearly four months versus the dollar at 108.73 yen.

On the currency front, the U.S. dollar is trading at 108.82 yen compared to the 109.20 yen it fetched at the close of NY trading on Thursday. With the sell-off on the day, the Nasdaq and the S&P 500 fell to their lowest closing levels in a month.

The market's backstop safety asset, gold, edged up to its latest two-month high of $1,288 an ounce.

The rhetoric between the USA and North Korea has continued to heat up, leading traders to look to safe havens such as gold and treasuries.

U.S. crude oil crude futures edged up 5 cents to $48.64 per barrel.

The recent resilience of data on the USA economy has not dampened the latest climb, despite depressing prices earlier in the week as reports returned high employment figures ahead of further U.S. inflation information this week.

Australian shares were down 1.3 percent, set for a weekly loss of 0.6 percent and Chinese and Hong Kong bluechips lost 1.6 percent and 1.9 percent respectively.

The Standard & Poor's 500 index fell 7 points, or 0.3 percent, to 2,467. Macy's sank 10.3 percent and Kohl's lost 5.8 percent.

U.S. producer prices unexpectedly recorded their biggest drop in almost a year, and the number of Americans filing for unemployment benefits unexpectedly rose last week.

A report released by the Labor Department showed a modest uptick in consumer prices in the USA in the month of July.

The technology sector was the S&P's biggest drag with a 2.2 percent drop. Orders fell 4.7 percent from the previous quarter in April-June, suggesting demand is weaker than expected, though economists say such measures are not overly important.

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