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| Version 5 | Version 6 |
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| Markets slide after North Korea fires missile over Japan – business live | Markets slide after North Korea fires missile over Japan – business live |
| (35 minutes later) | |
| 11.14am BST | |
| 11:14 | |
| Germany’s forthcoming federal elections will have little impact on the country’s credit rating over the next four years whatever the outcome, according to a report from Moody’s. Colin Ellis, a managing director at the ratings agency and co-author of the study, said: | |
| Although the German elections could result in a number of different potential coalitions, we don’t expect any plausible combination to have a material impact on the credit profiles of the country’s rated debt issuers. | |
| Germany’s sovereign credit quality is resilient to any plausible election outcome given the country’s very high economic, institutional and fiscal strength. | |
| However, growth and debt levels will be influenced by policymakers’ response to rising demographic pressures and their approach to labour market flexibility. At the European level, the government’s stance on issues such as debt pooling or fiscal transfers among European Union countries will be an important factor. | |
| Given the main parties’ differing views on these and other important policy areas, the composition of the next coalition will, at the margins at least, influence how Germany’s sovereign credit profile evolves. | |
| Updated | |
| at 11.24am BST | |
| 10.33am BST | 10.33am BST |
| 10:33 | 10:33 |
| #Sterling #trade-weighted index falls to lowest level since Nov 2016 (74.5) - reflection of both #euro strength & #pound softness | #Sterling #trade-weighted index falls to lowest level since Nov 2016 (74.5) - reflection of both #euro strength & #pound softness |
| 10.24am BST | 10.24am BST |
| 10:24 | 10:24 |
| Vix volatility index jumps 25% | Vix volatility index jumps 25% |
| As the market slide accelerates – the FTSE 100 is down 1.36%, Germany’s Dax has lost 1.96% and France’s Cac is 1.58% lower – the so-called fear index is on the rise. | As the market slide accelerates – the FTSE 100 is down 1.36%, Germany’s Dax has lost 1.96% and France’s Cac is 1.58% lower – the so-called fear index is on the rise. |
| The Vix volatility index has jumped 25% to 14.16 since the North Korea missile launch, though this is below the year high of 17.28 on 11 August after President Trump made his “fire and fury” comments against Kim Jong-un. | The Vix volatility index has jumped 25% to 14.16 since the North Korea missile launch, though this is below the year high of 17.28 on 11 August after President Trump made his “fire and fury” comments against Kim Jong-un. |
| Updated | Updated |
| at 10.47am BST | at 10.47am BST |
| 10.11am BST | 10.11am BST |
| 10:11 | 10:11 |
| Chris Beauchamp, chief market analyst at IG, said: | Chris Beauchamp, chief market analyst at IG, said: |
| After weeks of quiet, renewed geopolitical tensions and a soaring euro are combining to cause some impressive moves across markets this morning. We have seen triple-digit losses on the FTSE 100, while in Europe the surge in the euro past $1.20 has resulted in brutal morning for European equities. North Korea’s dramatic escalation last night prompted some impressive risk-off moves in Asia, with the European session naturally following suit. US futures are under pressure, although everyone is waiting for the first tweet on the subject from the Commander-in-Chief before hitting the sell button too hard. Hurricane Harvey is hitting insurers hard, as investors try to price in the potential costs of the devastation in Texas, while a drop in US Treasury yields is prompting a mini-rout in bank stocks. | After weeks of quiet, renewed geopolitical tensions and a soaring euro are combining to cause some impressive moves across markets this morning. We have seen triple-digit losses on the FTSE 100, while in Europe the surge in the euro past $1.20 has resulted in brutal morning for European equities. North Korea’s dramatic escalation last night prompted some impressive risk-off moves in Asia, with the European session naturally following suit. US futures are under pressure, although everyone is waiting for the first tweet on the subject from the Commander-in-Chief before hitting the sell button too hard. Hurricane Harvey is hitting insurers hard, as investors try to price in the potential costs of the devastation in Texas, while a drop in US Treasury yields is prompting a mini-rout in bank stocks. |
| Much of what we are seeing in equities this morning is also a reflection of the moves in the foreign exchange space; Jackson Hole duly delivered in terms of lack of news, and the reflex action has kicked in, with investors buying the euro, driving it to a 3-year high, and resuming their selling of the US dollar. We have a few weeks to go until the next Fed meeting, when the bank will get the chance to put a more dollar-positive view forward. Until then, we should expect further euro strength, and thus more downside for European stock markets. Ahead of the open, we expect the Dow to start at 21,666, 142 points lower from Monday’s close. | Much of what we are seeing in equities this morning is also a reflection of the moves in the foreign exchange space; Jackson Hole duly delivered in terms of lack of news, and the reflex action has kicked in, with investors buying the euro, driving it to a 3-year high, and resuming their selling of the US dollar. We have a few weeks to go until the next Fed meeting, when the bank will get the chance to put a more dollar-positive view forward. Until then, we should expect further euro strength, and thus more downside for European stock markets. Ahead of the open, we expect the Dow to start at 21,666, 142 points lower from Monday’s close. |
| 9.54am BST | 9.54am BST |
| 09:54 | 09:54 |
| Self explanatory: | Self explanatory: |
| #CNBCTV18Market | US futures extend losses; North Korea missile launch impacts US market pic.twitter.com/hfP2YQN5RW | #CNBCTV18Market | US futures extend losses; North Korea missile launch impacts US market pic.twitter.com/hfP2YQN5RW |
| #CNBCTV18Market | European market extend losses due to geo-political tensions pic.twitter.com/cobYButyHp | #CNBCTV18Market | European market extend losses due to geo-political tensions pic.twitter.com/cobYButyHp |
| 9.43am BST | 9.43am BST |
| 09:43 | 09:43 |
| Pound drops against euro but edges higher against dollar | Pound drops against euro but edges higher against dollar |
| Sterling is having a tough day against the single currency, thanks to continuing concerns about the outcome of Brexit talks as well as the strength of the euro. | Sterling is having a tough day against the single currency, thanks to continuing concerns about the outcome of Brexit talks as well as the strength of the euro. |
| The pound is currently down 0.4% at €1.0751. Investors are nervous about the lack of progress in the Brexit discussions and an uninspiring performance from the UK economy – it showed the slowest growth of any G7 country in the second quarter. | The pound is currently down 0.4% at €1.0751. Investors are nervous about the lack of progress in the Brexit discussions and an uninspiring performance from the UK economy – it showed the slowest growth of any G7 country in the second quarter. |
| Former MPC member Andrew Sentance tweeted: | Former MPC member Andrew Sentance tweeted: |
| Lackluster growth and #Brexit continue to undermine £. Sterling lowest vs euro since early 2009 - in the depths of the financial crisis. https://t.co/3R2JFFsLZX | Lackluster growth and #Brexit continue to undermine £. Sterling lowest vs euro since early 2009 - in the depths of the financial crisis. https://t.co/3R2JFFsLZX |
| However the strength of the euro is also a factor. ECB president Mario Draghi’s speech at the Jackson Hole gathering of central bankers at the end of last week revealed nothing much about future monetary policy; but that did little to dispel the idea the central bank would soon set out plans to cut back its economic stimulus measures, including easing its bond-buying programme. ING Bank said: | |
| The euro continues to march higher despite ECB President Mario Draghi staying tight-lipped over future policy plans at Jackson Hole (as we expected). The focus now turns to the crucial 7 September ECB meeting: out economists note that the demand for an ECB game plan on tapering is getting stronger by the day; indeed the key arguments in favour of tapering are the successful defeat of the deflation risk, the strong economic recovery and bond scarcity. However, we note that the ECB’s preference will be for a cautious tapering, with a very gradual withdrawal of some monetary stimulus that ideally doesn’t cause any tightening of financial conditions. | The euro continues to march higher despite ECB President Mario Draghi staying tight-lipped over future policy plans at Jackson Hole (as we expected). The focus now turns to the crucial 7 September ECB meeting: out economists note that the demand for an ECB game plan on tapering is getting stronger by the day; indeed the key arguments in favour of tapering are the successful defeat of the deflation risk, the strong economic recovery and bond scarcity. However, we note that the ECB’s preference will be for a cautious tapering, with a very gradual withdrawal of some monetary stimulus that ideally doesn’t cause any tightening of financial conditions. |
| If the pound is weak against the euro, then it is a different story regarding the dollar. | If the pound is weak against the euro, then it is a different story regarding the dollar. |
| The US currency has been under pressure on concerns about the continuing uncertainty in the White House, while Federal Reserve chair Janet Yellen gave it little support in her own speech at Jackson Hole. Meanwhile the revival of tensions with North Korea in the wake of the missile launch over Japan and worries about the costs of Hurricane Harvey - and its effect on US economic growth - has also had an impact. | The US currency has been under pressure on concerns about the continuing uncertainty in the White House, while Federal Reserve chair Janet Yellen gave it little support in her own speech at Jackson Hole. Meanwhile the revival of tensions with North Korea in the wake of the missile launch over Japan and worries about the costs of Hurricane Harvey - and its effect on US economic growth - has also had an impact. |
| So against the dollar, the pound is currently up 0.22% at $1.2960. | So against the dollar, the pound is currently up 0.22% at $1.2960. |
| Meanwhile the euro is at an 18 month high of around $1.20 against the dollar. | Meanwhile the euro is at an 18 month high of around $1.20 against the dollar. |
| Updated | Updated |
| at 11.10am BST | |
| 9.07am BST | 9.07am BST |
| 09:07 | 09:07 |
| Unsurprisingly, US markets are expected to open lower, with the Dow Jones Industrial Average future indicating a 118-point decline amid the North Korea tensions and Hurricane Harvey. | Unsurprisingly, US markets are expected to open lower, with the Dow Jones Industrial Average future indicating a 118-point decline amid the North Korea tensions and Hurricane Harvey. |
| Updated | Updated |
| at 9.15am BST | at 9.15am BST |
| 8.52am BST | 8.52am BST |
| 08:52 | 08:52 |
| Gold is up $4 an ounce at $1321 on fears about where the tensions between the US and North Korea will lead. | Gold is up $4 an ounce at $1321 on fears about where the tensions between the US and North Korea will lead. |
| In a sign of demand for the precious metal, investment firm the Pure Gold Company said it had seen a sharp increase in people buying physical gold. Its chief executive, Josh Saul, said: | In a sign of demand for the precious metal, investment firm the Pure Gold Company said it had seen a sharp increase in people buying physical gold. Its chief executive, Josh Saul, said: |
| We have been taking orders since 5am this morning from clients citing fears that tensions between the US and North Korea will escalate after North Korea’s latest missile test over Japan. President Trump has [previously] vowed to respond with “fire and fury” and many of our clients believe this will make the situation considerably worse, increasing the unpredictability of the geopolitical situation. | We have been taking orders since 5am this morning from clients citing fears that tensions between the US and North Korea will escalate after North Korea’s latest missile test over Japan. President Trump has [previously] vowed to respond with “fire and fury” and many of our clients believe this will make the situation considerably worse, increasing the unpredictability of the geopolitical situation. |
| We’ve seen a 78% increase in financial professions investing in physical gold on the expectation that the equity markets and the dollar will continue to slip while the gold price rallies. Physical gold investment from first time purchasers has increased by 87% as they worry about market uncertainty in the face of such volatile world leaders. | We’ve seen a 78% increase in financial professions investing in physical gold on the expectation that the equity markets and the dollar will continue to slip while the gold price rallies. Physical gold investment from first time purchasers has increased by 87% as they worry about market uncertainty in the face of such volatile world leaders. |
| Updated | Updated |
| at 9.04am BST | at 9.04am BST |
| 8.39am BST | 8.39am BST |
| 08:39 | 08:39 |
| The rise of gold through the $1,300 an ounce barrier – which had proved resistant for some while – is likely to lead to continued support for the precious metal, analysts believe. Hussein Sayed, chief market strategist at FXTM, said: | The rise of gold through the $1,300 an ounce barrier – which had proved resistant for some while – is likely to lead to continued support for the precious metal, analysts believe. Hussein Sayed, chief market strategist at FXTM, said: |
| Gold seems to have benefited from the tensions [following the North Korea missile launch], currently trading at a nine-month high. However, most of the gains in the precious metal occurred before the missile launch, meaning that there are different factors supporting prices. U.S. 10-year Treasury bond yields have been falling since 10 July, with total declines of 10.8%. This partially explains gold’s 8.6% surge since then, and investors are still not buying Trump’s tax reforms. Yields should be much higher than current levels, especially since the Fed didn’t seem to back off on raising rates. | Gold seems to have benefited from the tensions [following the North Korea missile launch], currently trading at a nine-month high. However, most of the gains in the precious metal occurred before the missile launch, meaning that there are different factors supporting prices. U.S. 10-year Treasury bond yields have been falling since 10 July, with total declines of 10.8%. This partially explains gold’s 8.6% surge since then, and investors are still not buying Trump’s tax reforms. Yields should be much higher than current levels, especially since the Fed didn’t seem to back off on raising rates. |
| Gary Cohn, head of Trump’s National Economic Council, has a high probability of replacing Janet Yellen when her term ends by January 2018. Cohn is not only expected to back financial sector deregulation, but also to keep interest rates low in order to support the implementation of Trump’s pro-growth economic policies. This provides another valid reason to purchase the yellow metal. With ongoing geopolitical tensions, the looming debt ceiling, threats to scrap Nafta, and a low yield environment, gold prices are likely to remain well supported. $1,300 has been a critical resistance level since the beginning of the year, with four failing attempts to break through; after yesterday’s surge however, $1,300 will likely turn into support. | Gary Cohn, head of Trump’s National Economic Council, has a high probability of replacing Janet Yellen when her term ends by January 2018. Cohn is not only expected to back financial sector deregulation, but also to keep interest rates low in order to support the implementation of Trump’s pro-growth economic policies. This provides another valid reason to purchase the yellow metal. With ongoing geopolitical tensions, the looming debt ceiling, threats to scrap Nafta, and a low yield environment, gold prices are likely to remain well supported. $1,300 has been a critical resistance level since the beginning of the year, with four failing attempts to break through; after yesterday’s surge however, $1,300 will likely turn into support. |
| Updated | Updated |
| at 9.01am BST | at 9.01am BST |
| 8.24am BST | 8.24am BST |
| 08:24 | 08:24 |
| Julia Kollewe | Julia Kollewe |
| Back with the UK economy, and some weak housing market figures. My colleague Julia Kollewe has the details: | Back with the UK economy, and some weak housing market figures. My colleague Julia Kollewe has the details: |
| UK house prices dipped this month, dragging down the annual growth rate, in further evidence of a cooling market. | UK house prices dipped this month, dragging down the annual growth rate, in further evidence of a cooling market. |
| The average price of a home fell 0.1% between July and August to £210,495, according to Nationwide, Britain’s biggest building society. Prices rose in July and June but fell between March and May, the first time this had happened since the financial crisis. | The average price of a home fell 0.1% between July and August to £210,495, according to Nationwide, Britain’s biggest building society. Prices rose in July and June but fell between March and May, the first time this had happened since the financial crisis. |
| The latest monthly price drop took the annual growth rate back down to 2.1%, a level last seen in May, which was the lowest rate in four years, from 2.9% in July. | The latest monthly price drop took the annual growth rate back down to 2.1%, a level last seen in May, which was the lowest rate in four years, from 2.9% in July. |
| Robert Gardner, Nationwide’s chief economist, said: “The slowdown in house price growth to the 2-3% range in recent months from the 4-5% prevailing in 2016 is consistent with signs of cooling in the housing market and the wider economy.” | Robert Gardner, Nationwide’s chief economist, said: “The slowdown in house price growth to the 2-3% range in recent months from the 4-5% prevailing in 2016 is consistent with signs of cooling in the housing market and the wider economy.” |
| He noted that economic growth had halved from last year to about 0.3% per quarter in the first half of this year and that the number of mortgages approved for house purchase hit a nine-month low in June, while surveyors had reported softening in the number of new buyer inquiries. | He noted that economic growth had halved from last year to about 0.3% per quarter in the first half of this year and that the number of mortgages approved for house purchase hit a nine-month low in June, while surveyors had reported softening in the number of new buyer inquiries. |
| He said in some respects the slowdown in the housing market was surprising, given the strength of the labour market, while mortgage rates have remained close to all-time lows. | He said in some respects the slowdown in the housing market was surprising, given the strength of the labour market, while mortgage rates have remained close to all-time lows. |
| But household finances are under mounting pressure, with the cost of living rising steadily as the weak pound bites, and wage growth stagnating. | But household finances are under mounting pressure, with the cost of living rising steadily as the weak pound bites, and wage growth stagnating. |
| The full report is here: | The full report is here: |
| Updated | Updated |
| at 8.43am BST | at 8.43am BST |
| 8.13am BST | 8.13am BST |
| 08:13 | 08:13 |
| Insurers fall on Hurricane Harvey cost fears | Insurers fall on Hurricane Harvey cost fears |
| With the costs of Hurricane Harvey estimated by some reports to be as much as $100bn when the final tally comes in, insurers have come under pressure. | With the costs of Hurricane Harvey estimated by some reports to be as much as $100bn when the final tally comes in, insurers have come under pressure. |
| Lancashire Holdings is down more than 2%, Beazley has fallen 1.6% and Hiscox is 1% lower. | Lancashire Holdings is down more than 2%, Beazley has fallen 1.6% and Hiscox is 1% lower. |
| Updated | Updated |
| at 9.25am BST | at 9.25am BST |
| 8.08am BST | 8.08am BST |
| 08:08 | 08:08 |
| European markets open sharply lower | European markets open sharply lower |
| Amid concerns about North Korea firing a missile over Japan, Europe’s stock markets are sliding in early trading. | Amid concerns about North Korea firing a missile over Japan, Europe’s stock markets are sliding in early trading. |
| The FTSE 100 has fallen by 1%, Germany’s Dax and France’s Cac are down 0.9% and Italy’s FTSE MIB has fallen 0.5%. The European Stoxx 600 has hit a six-month low. | The FTSE 100 has fallen by 1%, Germany’s Dax and France’s Cac are down 0.9% and Italy’s FTSE MIB has fallen 0.5%. The European Stoxx 600 has hit a six-month low. |
| Updated | Updated |
| at 9.03am BST | at 9.03am BST |
| 8.05am BST | 8.05am BST |
| 08:05 | 08:05 |
| French economy grows again | French economy grows again |
| France’s economy grew by 0.5% in the three months to June, in line with the initial estimates and analyst forecasts. | France’s economy grew by 0.5% in the three months to June, in line with the initial estimates and analyst forecasts. |
| This is the third quarter in a row that the country’s GDP has increased by that amount. Exports bounced back, imports slowed significantly and domestic demand held firm, said statistics agency Insee. But corporate investment decelerated sharply, up by 0.7% after a previous rise of 1.3%. | This is the third quarter in a row that the country’s GDP has increased by that amount. Exports bounced back, imports slowed significantly and domestic demand held firm, said statistics agency Insee. But corporate investment decelerated sharply, up by 0.7% after a previous rise of 1.3%. |
| Updated | Updated |
| at 8.39am BST | at 8.39am BST |
| 7.53am BST | 7.53am BST |
| 07:53 | 07:53 |
| Of course the US president has other things on his plate too. There is his tax overhaul speech on Wednesday, but there is also the problem of the debt ceiling and Trump’s threat last week to shut down the government if he does get funds for his Mexican border wall. | Of course the US president has other things on his plate too. There is his tax overhaul speech on Wednesday, but there is also the problem of the debt ceiling and Trump’s threat last week to shut down the government if he does get funds for his Mexican border wall. |
| The arrival of Hurricane Harvey and the cost of repairing the damage will only put more pressure on the country’s finances, and will not help Trump’s attempts to fund his pet project. CMC’s David Madden says: | The arrival of Hurricane Harvey and the cost of repairing the damage will only put more pressure on the country’s finances, and will not help Trump’s attempts to fund his pet project. CMC’s David Madden says: |
| Traders are looking ahead to Donald Trump’s speech on Wednesday, where he is going to talk about bringing in tax reform, and investors are certainly in favour of the President’s pro-business policies, but will the plans get introduced. Mr Trump failed to overhaul the healthcare system, and it wasn’t just the Democrats who scuppered his plans, members of his own party opposed it too. | Traders are looking ahead to Donald Trump’s speech on Wednesday, where he is going to talk about bringing in tax reform, and investors are certainly in favour of the President’s pro-business policies, but will the plans get introduced. Mr Trump failed to overhaul the healthcare system, and it wasn’t just the Democrats who scuppered his plans, members of his own party opposed it too. |
| What benefits the President, is that tax reform is the sort of policy that you could imagine support coming from both parties. | What benefits the President, is that tax reform is the sort of policy that you could imagine support coming from both parties. |
| Keeping with US politics, the debt ceiling is looming and Mr Trump has already warned the US government that it risks being shut down if it can’t find the funds to build the wall along the Mexican border. The timing of Hurricane Harvey is adding to the problems as Washington will have to deal with those costs too. Investors are nervous about the potential political gridlock in the US. | Keeping with US politics, the debt ceiling is looming and Mr Trump has already warned the US government that it risks being shut down if it can’t find the funds to build the wall along the Mexican border. The timing of Hurricane Harvey is adding to the problems as Washington will have to deal with those costs too. Investors are nervous about the potential political gridlock in the US. |
| Updated | Updated |
| at 8.40am BST | at 8.40am BST |
| 7.48am BST | 7.48am BST |
| 07:48 | 07:48 |
| President Trump’s response so far to the latest North Korean missile has been fairly measured but investors will be watching what he says or does next. Konstantinos Anthis at ADS Securities says: | President Trump’s response so far to the latest North Korean missile has been fairly measured but investors will be watching what he says or does next. Konstantinos Anthis at ADS Securities says: |
| Stock traders are concerned that if the situation escalates even further then the markets will look for risk-off assets taking bets off the equities. The US futures are also pointing towards a bearish opening and the important question now is what President Trump’s response is going to be: if the US President opts for a tempered response then stock traders will breathe a sigh of relief but on the opposite case a sharp sell-off can drive the equity indices down to their recent lows. | Stock traders are concerned that if the situation escalates even further then the markets will look for risk-off assets taking bets off the equities. The US futures are also pointing towards a bearish opening and the important question now is what President Trump’s response is going to be: if the US President opts for a tempered response then stock traders will breathe a sigh of relief but on the opposite case a sharp sell-off can drive the equity indices down to their recent lows. |
| Updated | Updated |
| at 8.41am BST | at 8.41am BST |
| 7.43am BST | 7.43am BST |
| 07:43 | 07:43 |
| Agenda: Investors nervous amid new geopolitical tensions | Agenda: Investors nervous amid new geopolitical tensions |
| Good morning, and welcome to our rolling coverage of the latest news from the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the latest news from the world economy, the financial markets, the eurozone and business. |
| News that North Korea had fired a missile over Japan has rattled stock markets, after a calmer period when it looked as though the belligerent words and actions from Kim Jong-un had petered out. | News that North Korea had fired a missile over Japan has rattled stock markets, after a calmer period when it looked as though the belligerent words and actions from Kim Jong-un had petered out. |
| Japanese prime minister Shinzō Abe called the missile launch an “unprecedented and grave threat” to the country’s security, and both he and US president Donald Trump have vowed to ramp up the pressure on North Korea. | Japanese prime minister Shinzō Abe called the missile launch an “unprecedented and grave threat” to the country’s security, and both he and US president Donald Trump have vowed to ramp up the pressure on North Korea. |
| But after the initial reaction, traders recovered some of their nerves. The Nikkei 225 is down 0.47%, while the Hang Seng is 0.27% lower. European markets are forecast to be a bit worse off at the open: | But after the initial reaction, traders recovered some of their nerves. The Nikkei 225 is down 0.47%, while the Hang Seng is 0.27% lower. European markets are forecast to be a bit worse off at the open: |
| Our European opening calls:$FTSE 7362 -0.53%$DAX 12066 -0.48%$CAC 5049 -0.61%$IBEX 10222 -0.62%$MIB 21587 -0.64% | Our European opening calls:$FTSE 7362 -0.53%$DAX 12066 -0.48%$CAC 5049 -0.61%$IBEX 10222 -0.62%$MIB 21587 -0.64% |
| David Madden,analyst at CMC Markets UK, said: | David Madden,analyst at CMC Markets UK, said: |
| Tensions have been running high for a number of weeks now in relation to North Korea, and this move has sent traders running for cover. The situation surrounding North Korea has become more serious now, and we are seeing a risk-off strategy being adopted by traders. | Tensions have been running high for a number of weeks now in relation to North Korea, and this move has sent traders running for cover. The situation surrounding North Korea has become more serious now, and we are seeing a risk-off strategy being adopted by traders. |
| There was a knee-jerk reaction to the missile being launched, but after a while traders nerves settled, and we saw a bounce back in equity markets – which are off the lows of the session. | There was a knee-jerk reaction to the missile being launched, but after a while traders nerves settled, and we saw a bounce back in equity markets – which are off the lows of the session. |
| As usual in these circumstances, traders were looking for havens and the yen, ironically, the Swiss franc and gold were in demand. Ipek Ozkardeskaya, senior market analyst at London Capital Group, said: | As usual in these circumstances, traders were looking for havens and the yen, ironically, the Swiss franc and gold were in demand. Ipek Ozkardeskaya, senior market analyst at London Capital Group, said: |
| Investors rushed to the safe haven assets on Tuesday … the Japanese 10-year yield fell to the lowest level in more than four months. The USDJPY traded at a fresh August low (108.34). Data-wise, the Japanese household spending unexpectedly contracted by 0.2% year-on-year in June. The latest data is bad news for inflation and could have revived the Bank of Japan doves, however the safe haven inflows overshadowed the yen-bears today. | Investors rushed to the safe haven assets on Tuesday … the Japanese 10-year yield fell to the lowest level in more than four months. The USDJPY traded at a fresh August low (108.34). Data-wise, the Japanese household spending unexpectedly contracted by 0.2% year-on-year in June. The latest data is bad news for inflation and could have revived the Bank of Japan doves, however the safe haven inflows overshadowed the yen-bears today. |
| As for gold, it climbed to its highest level for nine months, at $1317 an ounce. | As for gold, it climbed to its highest level for nine months, at $1317 an ounce. |
| Elsewhere, crude recovered some of its recent losses as Hurricane Harvey continues to do its damage to Texas and the oil production sites located there. Brent is up 0.44% at $52.12, but again the move was less than might have been expected. Ozkardeskaya said: | Elsewhere, crude recovered some of its recent losses as Hurricane Harvey continues to do its damage to Texas and the oil production sites located there. Brent is up 0.44% at $52.12, but again the move was less than might have been expected. Ozkardeskaya said: |
| The re-energized Hurricane Harvey continues devastating the Texas-Louisiana border and companies including Exxon Mobil and Motiva are expected to pause their operations, which should be reflected in US oil inventories over the coming weeks and support a minor recovery in oil prices. Gasoline prices are up for the sixth consecutive session. | The re-energized Hurricane Harvey continues devastating the Texas-Louisiana border and companies including Exxon Mobil and Motiva are expected to pause their operations, which should be reflected in US oil inventories over the coming weeks and support a minor recovery in oil prices. Gasoline prices are up for the sixth consecutive session. |
| Our live coverage of the hurricane is here: | Our live coverage of the hurricane is here: |
| There are also some nerves in the market before Trump’s speech on Wednesday when he is due to announce tax reform plans. These have been one of the key reasons for the market giving the president some leeway despite all the controversy, but there is still doubt as to whether he will be able to push his proposals through Congress. | There are also some nerves in the market before Trump’s speech on Wednesday when he is due to announce tax reform plans. These have been one of the key reasons for the market giving the president some leeway despite all the controversy, but there is still doubt as to whether he will be able to push his proposals through Congress. |
| On another thin day for data, we have had the latest Nationwide house price index (of which more shortly) and French GDP is also due soon. | On another thin day for data, we have had the latest Nationwide house price index (of which more shortly) and French GDP is also due soon. |
| Updated | Updated |
| at 7.53am BST | at 7.53am BST |