Article / 11 September 2017 at 7:00 GMT

Morning Markets: Asia-Pacific stocks rally on easing of N.Korea fears

Consulting editor / TradingFloor
Norway







MM TABLE

 


Watchlist

  • Japan: Machinery orders (published)
  • Norway: CPI (published)
  • Canada: Housing starts (1215 GMT)


Asia-Pacific shares rallied on Monday as the weekend passed without another North Korean missile launch or test blast, which had been feared. The US dollar firmed, and gold, the Japanese yen and other safe-haven assets softened.

Tokyo's Nikkei 225 gained 1.4%, while the Shanghai Composite added 0.3%.

But Pyongyang wheeled out the fiery rhetoric again on Monday, warning the US that it would retaliate if the UN Security Council approves US-backed harsher sanctions. "The forthcoming measures to be taken by the DPRK will cause the US the greatest pain and suffering it had ever gone through in its entire history," the North Korean KCNA news agency said, according to western news reports.

Hurricane Irma battered Florida, but it was downgraded to a lower category of tropical storm when it proved to less powerful than feared, though the damages are still estimated to be enormous.

Gold retreated on the easing of worries -- related both to North Korea and to Hurricane Irma.

US stocks ended mixed on Friday, with the Dow industrials virtually flat, while the Nasdaq lost 0.6% and the S&P500 shed 0.2%.

Norwegians vote on Monday in a general election that looks too close to call.

Market signals

Asian session

  • Irma, the second hurricane of the season, didn’t reach the feared Category 5 strength
  • However, investors remained cautious over Irma's impact
  • North Korea warns US over sanctions push ahead of UN vote
  • China’s central bank may scrap reserve requirements for forward yuan positions
  • 10-year US Treasury yield rose 4 basis points to 2.09%
  • Asian stocks rose for most of the day in line with US equity futures
  •  Japan’s Nikkei rallied to a one-week high on Monday morning, up 1.4%
  • Hong Kong's Hang Seng was up 0.91% in afternoon trading, and the ASX rose 0.73%
  •  WTI crude added 0.9% to $47.91/b in early trading after losses on Friday
  • Gold declined 0.7% to $1,337.66/oz

Forex ahead

  • JPY fell 0.5% to 108.37 to the USD in Asian trading
  • AUDUSD was at 80.53 US cents, down 0.1% in mid trading
  • Bloomberg Dollar Spot Index rose 0.2% after a 1.5 % drop last week
  • USD was last up 0.16% against the offshore yuan at 6.5128 yuan

From the Floor

Rebound. “Risk rebounded essentially on what didn’t happen over the weekend, rather than what did happen,” says Bresler.

Positive spillover. "We had risk-on in the Asian session, and it could carry on in Europe and the US,” says Garnry.

Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.

In opinion

Thanks banks
It's not often the banks save anyone, but their buoyancy in the Aussie market this morning saved the ASX from yet another fall, says Saxo Capital Markets.

Breather
Asian markets breathed a sign of relief after the threat of hurricanes and bombs, and the Japanese equities market came back to life, says Saxo APAC Sales Trading.

Pivotal

This is a pivotal week, says Saxo's Kay Van-Petersen, even if the Feds have gone quiet and the weather has not been as disastrous as expected.


Bergen

 Bergen, Norway. Norwegians vote in a general election on Monday, with the Labour-led opposition and the governing centre-right bloc running neck-and-neck. Photo: Shutterstock 


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