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You can find the current article at its original source at http://www.theguardian.com/business/live/2017/aug/30/markets-recover-after-korea-shock-and-ahead-of-us-gdp-business-live
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Markets recover after Korea shock and ahead of US GDP - business live | Markets recover after Korea shock and ahead of US GDP - business live |
(35 minutes later) | |
8.15am BST | |
08:15 | |
European markets open higher | |
After Tuesday’s slide in the wake of North Korea’s latest missile launch, European markets are heading higher in early trading. | |
The FTSE 100 is up 0.5%, Germany’s Dax has added 0.7%, France’s Cac has climbed 0.6% and Spain’s Ibex is 0.7% better. | |
8.03am BST | |
08:03 | |
The pound is having another mixed day, but it is not exactly suffering any dramatic moves so far. | |
Against the dollar, sterling has edged down 0.08% to $1.2909 as the US currency steadies after its recent losses. | |
But against the euro, the pound has recovered a little ground, up 0.04% at €1.0793. | |
Meanwhile gold - which jumped on Tuesday as investors sought havens for their cash - has dipped $1 to $1307 an ounce. | |
7.46am BST | 7.46am BST |
07:46 | 07:46 |
The economic impact of tropical storm Harvey will not be felt until next month’s figures at the earliest, so the US data to be released later will be considered in the light of the next Federal Reserve meeting and the central bank’s interest rate policy. | The economic impact of tropical storm Harvey will not be felt until next month’s figures at the earliest, so the US data to be released later will be considered in the light of the next Federal Reserve meeting and the central bank’s interest rate policy. |
Expectations of another US rate rise in the near future have receded - part of the reason for the recent weakness in the dollar - but stronger than expected figures today and on Friday with the non-farm payroll numbers could see sentiment change again. | Expectations of another US rate rise in the near future have receded - part of the reason for the recent weakness in the dollar - but stronger than expected figures today and on Friday with the non-farm payroll numbers could see sentiment change again. |
As it it, the ADP report is expected to show around 185,000 new private sector jobs in August after a 178,000 rise in July. Second quarter GDP is forecast to rise from the initial estimate of 2.6% to 2.7% or even 2.8%. | As it it, the ADP report is expected to show around 185,000 new private sector jobs in August after a 178,000 rise in July. Second quarter GDP is forecast to rise from the initial estimate of 2.6% to 2.7% or even 2.8%. |
7.35am BST | 7.35am BST |
07:35 | 07:35 |
Agenda: UK lending figures, German inflation and US growth data in spotlight | Agenda: UK lending figures, German inflation and US growth data in spotlight |
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. |
Stock markets look a little calmer after Monday’s slide in the wake of North Korea’s provocative missile launch over Japan. Investors took some reassurance from President Trump’s relatively measured response. Stating that “all options are on the table” is a lot less bellicose than promising “fire and fury”, so after an early fall the Dow Jones Industrial Average actually ended in positive territory, up 0.26%. | Stock markets look a little calmer after Monday’s slide in the wake of North Korea’s provocative missile launch over Japan. Investors took some reassurance from President Trump’s relatively measured response. Stating that “all options are on the table” is a lot less bellicose than promising “fire and fury”, so after an early fall the Dow Jones Industrial Average actually ended in positive territory, up 0.26%. |
The positive mood has filtered through to Asia, with the Hang Seng up 0.94% and the Nikkei 225 0.72% better. So European markets are expected to recover a little of Monday’s lost ground: | The positive mood has filtered through to Asia, with the Hang Seng up 0.94% and the Nikkei 225 0.72% better. So European markets are expected to recover a little of Monday’s lost ground: |
Our European opening calls:$FTSE 7367 up 29$DAX 12006 up 60$CAC 5062 up 30$IBEX 10258 up 66$MIB 21572 up 164 | Our European opening calls:$FTSE 7367 up 29$DAX 12006 up 60$CAC 5062 up 30$IBEX 10258 up 66$MIB 21572 up 164 |
But some believe the markets may be too calm, given the tensions with North Korea and the country’s promise of more action in the region. Michael Hewson, chief market analyst at CMC Markets UK, said: | But some believe the markets may be too calm, given the tensions with North Korea and the country’s promise of more action in the region. Michael Hewson, chief market analyst at CMC Markets UK, said: |
Having seen stock markets in Asia and Europe drop sharply and the traditional haven trades rally in the aftermath of North Korea’s provocative missile launch over Japan earlier this week, it wouldn’t have been a surprise to see US markets follow suit. | Having seen stock markets in Asia and Europe drop sharply and the traditional haven trades rally in the aftermath of North Korea’s provocative missile launch over Japan earlier this week, it wouldn’t have been a surprise to see US markets follow suit. |
Despite the escalation in tension and the universal condemnation the missile launch has provoked, US markets, despite initially opening sharply lower, rallied strongly in the afternoon session to close the day higher. | Despite the escalation in tension and the universal condemnation the missile launch has provoked, US markets, despite initially opening sharply lower, rallied strongly in the afternoon session to close the day higher. |
It is true that flare ups on the Korean peninsula are nothing new and previous instances have always resulted in a winding back of tension, and it would appear that US investors have decided that recent events are likely to go the same way, as the markets “muscle memory” of selling the panic and then buying the dip kicked in. | It is true that flare ups on the Korean peninsula are nothing new and previous instances have always resulted in a winding back of tension, and it would appear that US investors have decided that recent events are likely to go the same way, as the markets “muscle memory” of selling the panic and then buying the dip kicked in. |
In ordinary circumstances this might seem sensible, however the events of the last few weeks can hardly be described as ordinary, which suggests that markets could be being rather naïve that current events can be contained. | In ordinary circumstances this might seem sensible, however the events of the last few weeks can hardly be described as ordinary, which suggests that markets could be being rather naïve that current events can be contained. |
President Trump of course also has to contend with the devastating floods from tropical storm Harvey, both the damage done and the cost to the US economy. Our live coverage of the impact of the storm is here: | President Trump of course also has to contend with the devastating floods from tropical storm Harvey, both the damage done and the cost to the US economy. Our live coverage of the impact of the storm is here: |
On top of that, he is expected to give more details of his long awaited tax reform programme. | On top of that, he is expected to give more details of his long awaited tax reform programme. |
It is also a fairly busy day for data as the month comes to and end. Still with the US, there are second quarter GDP figures and the latest private payroll numbers, which are scoured for clues to Friday’s non-farm payroll numbers. | It is also a fairly busy day for data as the month comes to and end. Still with the US, there are second quarter GDP figures and the latest private payroll numbers, which are scoured for clues to Friday’s non-farm payroll numbers. |
In the UK there are the latest bank lending and mortgage figures, and in Germany, inflation data for August. | In the UK there are the latest bank lending and mortgage figures, and in Germany, inflation data for August. |
The Agenda: | The Agenda: |
9.30 BST UK consumer credit and mortgage lending (July) | 9.30 BST UK consumer credit and mortgage lending (July) |
10.00 BST Eurozone confidence figures (August) | 10.00 BST Eurozone confidence figures (August) |
13.00 BST German inflation (August) | 13.00 BST German inflation (August) |
13.15 BST US ADP employment data (August) | 13.15 BST US ADP employment data (August) |
13.30 BST US GDP (second quarter) | 13.30 BST US GDP (second quarter) |