Article / 09 August 2017 at 7:00 GMT

Morning Markets: Asia rattled by Trump 'fire and fury' N.Korea warning

Consulting editor / TradingFloor
Norway







MM TABLE

 

Watchlist

  • China: PPI (published)
  • Italy: Industrial production (0800 GMT)
  • Greece: CPI (0900 GMT)
  • Canada : Housing starts (1215 GMT)
  • US: Preliminary productivity and costs (1230 GMT)
  • US: EIA weekly petroleum status report, incl. crude oil stocks (1430 GMT)
  • New Zealand: RBNZ monetary policy statement (2100 GMT)

Asian markets were rattled on Wednesday by heightened geopolitical worries after US president Donald Trump warned North Korea that any threat to the US would be met with "fire and fury", and North Korea responded by saying it was considering a missile strike on Guam, a US Pacific territory.

"North Korea best not make any more threats to the United States. They will be met with fire and fury like the world has never seen," Trump told reporters at his golf club in Bedminster, New Jersey, according to news reports.

The US dollar fell and the safe-haven Japanese yen strengthened through 110 to the USD after North Korea's response. US stocks slipped, and the VIX volatility index ended at its highest in nearly a month on Tuesday. 

On Wednesday, Japan's Nikkei 225 fell 1.3%, and the Shanghai Composite was down x.x%.

Oil prices dropped on a rebound in production at Libya's largest oilfield.


Market signals

Asian session

  • Asian markets were lower on geopolitical tensions between the US and North Korea
  • Trump warned that North Korea's threats will be met with 'fire and fury'
  • North Korea then reportedly said it was "carefully examining" a plan to strike Guam 
  • Only the ASX200 made gains in Asian trade
  • Inflation in China remains sluggish rising 1.4% over the 12 months to July
  • China's PPI gained 5.5%, the same rate it recorded in June
  • Australia's largest company, CBA, delivered bumper full-year profit of $A9.88 billion 
  • Australia's MI consumer sentiment index fell 1.2% in August, its lowest in a year
  • Monthly home-loan approvals in Australia rose 0.5% in June, less than the 1.5% expected
  • The BoE warned Brexit would put a strain on regulatory resources
  • Singapore was closed for a national public holiday

Forex ahead

  • Aussie dollar fell to a three-week low on the China and home-loan figures
  • AUDUSD was 0.7870 at 0500 GMT
  • JPY strengthened following North Korea's statement; it was 109.96 at 0500 GMT

From the Floor

Safe-haven bonds. "We see also the reaction to the geopolitical escalation in North Korea -- classic risk-off mode," says Fasdal.

Risks. "Geopolitical risks are generally increasing," says Garnry. "[But] markets are not really scared by this."

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

In opinion

1..2..3
Italy's industrial activity for June is expected to record monthly output rising 0.2% and the year-on-year pace picking up to a 3.2% gain, writes James Picerno.

Bumper profit
The ASX200 was up in early trade as its largest stock, the Commonwealth Bank of Australia, delivered a bumper full-year profit of $A9.88 billion, writes Saxo's Sydney trading team.


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 North Korea says it is considering a missile strike on the US Pacific territory of Guam, hours after Trump said any threat would be met with 'fire and fury'. Photo: Shutterstock

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