Trump warning over North Korea hits markets

Paterniano Del Favero
Agosto 15, 2017

North Korea said it was completing plans to fire four intermediate-range missiles over Japan to land near the US Pacific island territory of Guam in an unusually detailed threat that further heightened tensions with the United States.

Asian equity markets extended a global slide on Friday, sending investors fleeing to less risky assets such the yen, the Swiss franc and U.S. Treasuries.

The CBOE volatility index, the most widely followed barometer of expected near-term United States stock market volatility, hit its highest mark since November 8, when Trump was elected president.

The franc reversed a two-week losing streak and gained 1.1% to as firm as 0.9611 per dollar. The euro was at US$1.1826. Global benchmark Brent also fell 0,9 percent, to $51,44, after Thursday's 1,5 percent drop. It since drifted back towards the $1.17 level before being pushed up by weak U.S. data.

"Depending on how North Korea acts, the yen could further rise (relative to the dollar)", a dealer at a foreign exchange brokerage said. On an annual basis, output rose by 0.3%, up from -0.2% in May.

Data from the Ministry of Economy, Trade and Industry showed that Japan's tertiary activity remained flat in June. Come the United Kingdom trading session and a continued sell-off was seen, taking the pair to an eight week low.

Just a week ago, global equities reached all-time highs on expectations for a sustained global recovery in the face of tighter U.S. monetary policy. We would like to recommend buying gold at the current price and more so at correction. The Producer Price Index (PPI) slipped 0.1% when a slight increase was actually forecast. Excluding food and energy components, PPI was also down 0.1% m/m in July, while the annual rate moderated to 1.8% from 1.9%, missing forecasts of 2.1%.

Netflix shares were down 0.86 percent after Barron's reported on Saturday that the stock could drop by more than half by the end of the decade as Walt Disney plans its own streaming service and Amazon looms.

Meanwhile on the domestic front, USA initial jobless claims for the week ended July 29 exceeded consensus estimates (http://www.marketwatch.com/story/us-jobless-claims-rise-by-3000-to-244000-2017-08-10), recording 244,000 versus 240,000 expected this morning. Expectations were for 240k and compares with a revised 241k in the prior week.

The S&P 500 Index fell to session lows Tuesday, and the CBOE Volatility Index jumped 11 per cent after Trump spoke.

A broader measure of the dollar, the ICE Dollar index, which compares the buck to six rivals, was trading at 93.6450 compared with 93.7170 before the jobless claims release.

On Thursday, New York Federal Reserve President William Dudley said he expects sluggish U.S. inflation to rise over the next several months while the hot labour market gets even hotter.

Altre relazioni OverNewsmagazine

Discuti questo articolo

SEGUI I NOSTRI GIORNALE