Article / 10 August 2017 at 7:00 GMT

Morning Markets: Investors on edge as North Korea-US standoff persists

Consulting editor / TradingFloor
Norway







MM TABLE

 


Watchlist

  • Japan: Machinery orders (published)
  • Norway: CPI (0600 GMT)
  • France: Industrial production index (0645 GMT)
  • UK: Index of production (0830 GMT)
  • Greece: Labour force survey (0900 GMT)
  • Ireland: CPI (1000 GMT)
  • Portugal: CPI (1000 GMT)
  • UK: NIESR GDP Estimate (1200 GMT)
  • US: Weekly jobless claims (1230 GMT)
  • US: PPI (1230 GMT)
  • US: EIA weekly natural gas storage report (1430 GMT)

Asia-Pacific equities slipped on Thursday, though fears of a potential conflict between the US and North Korea went off their intense boil after a flare-up in which the two sides exchanged stern warnings. US officials sought on Wednesday to dampen the tensions after president Donald Trump warned North Korea that threats to the US would be met with 'fire and fury' and Pyongyang said it was considering launching a missile at a US airbase on Guam in the Pacific.

The major Asian equity indices were lower, though steadier than on Wednesday, with Japan's Nikkei 225 ending virtually flat, but Hong Kong's Hang Seng lost 1.6% as financial stocks suffered.

Dax futures traded flat into the European open on Thursday.

The Reserve Bank of New Zealand kept its cash rate unchanged at 1.75% and said monetary policy would "remain accommodative for a considerable period" in the face of numerous uncertainties. The kiwi dollar rose after the announcement.

The People's Bank of China strengthened the midpoint of the yuan's trading band to the USD beyond 6.7 for the first time in more than 10 months.


Market signals

Asian session

  • Worries about North Korea had limited initial impact on Asian sentiment
  • However, by late afternoon trade all Asian indices were down slightly
  • Korea's Kospi Composite looked fragile; it was down 0.8% at 0500 GMT
  • Hang Seng was 1.6% lower at the same time, and the Shanghai Comp was down 1%
  • North Korea called Trump's rhetoric 'a load of nonsense' and said he only understood force
  • Japan's core machinery orders fell 1.9% in June; a rise of 3.6% was expected
  • Japan's yearly PPI to June rose 2.6%, above expectations
  • The RBNZ kept rates steady at 1.75%
  • Australia's inflationary expectations fell in August to 4.2% from 4.4% in July
  • Chinese steel futures are trading near a 4-1/2-year high

Forex ahead

  • Geopolitical tensions promoted a flight to safe havens and lifted the Swiss franc
  • HKD has rebounded from its recent slide
  • NZD rose, despite the RBNZ decision to keep rates on hold
  • Fragile Aussie dollar slipped below 0.79 to the USD

From the Floor

Threat. ”The threat of North Korea is still looming out there on the horizon,” says Garnry.

Bullish. "Silver is catching a bid now. Good bullish sentiment across precious metals now," says Hansen.

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

In opinion

1..2..3
The stable trend In GDP growth in the UK will be welcomed at a time of rising uncertainty, due partly to the Brexit talks with the EU, says James Picerno.

Asia dodges flare-up
By the time Asian markets began trading today, much of the fresh bout of geopolitical tension over North Korea had eased, says the team at Saxo Capital Markets Australia.

Yield fears
Fixed-income markets are fraught with fears of increasing yields due to worries that central banks will turn hawkish on inflation, but there's no drastic bond selloff in sight, writes Simon Fasdal.

Rangebound oil
Crude oil has settled into a relatively tight range after a July surge, but the upside remains capped as rising US and Libyan production is likely to offset inventory declines, says Ole Hansen.


Guam

 Peaceful, tropical Guam? North Korea has threatened to fire a missile at the US Pacific territory, which is home to several US military bases. Photo: Shutterstock

Morning Markets goes out on the TradingFloor platform at 0700 GMT, Monday to Friday.
Click here
to make sure you're up to date with the latest developments.

Relevant articles for you

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail