North Korea standoff wipes $1trn off global stocks

North Korea standoff wipes $1trn off global stocks

Traders reacted with dismay to his fresh warning Thursday that his earlier threat to unleash "fire and fury" on the reclusive nuclear-armed state may not have been "tough enough".

Equity markets had traded with a soft tone in Europe and there was a sharp increase in selling pressure in NY with the S&P 500 index declining by close to 1.0%. "But with the rhetoric having gone to a different level, the market just can't afford to take that risk", said BNY Mellon FX strategist Neil Mellor.

"The cooler CPI figures this morning follow similarly lower than expected wholesale price data yesterday and together, have highlighted the extremely benign inflation backdrop that has reduced expectations for Fed lending rate hikes in the months ahead", said Omer Esiner, an analyst at Commonwealth Foreign Exchange. The Stoxx Europe 600 benchmark was down 1% (http://www.marketwatch.com/story/european-stocks-face-worst-week-in-9-months-on-us-north-korea-tensions-2017-08-11), while Hong Kong's Hang Seng led the Asian losses with a drop of 2%.

The Japanese yen hit an eight-week high against the US dollar, and USA -traded Nikkei stock futures dropped 2 percent to their lowest since mid May.

There were falls of almost 2% on South Korea's Kospi and Hong Kong's Hang Seng, with markets in mainland China and Australia also down - taking their cues from sharp losses on Wall Street earlier.

The tentative gains "suggest that the headline shock value pertaining to the US-North Korea standoff is starting to dissipate, which is to say actual action will now speak much louder than words", said Briefing.com analyst Patrick O'Hare.

The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors there will repatriate funds should a crisis materialize.


Many world stock markets have hit record or multi-year highs in recent weeks, leaving them vulnerable to a selloff, and the tensions over North Korea have proved to be the trigger.

Materials, a sector that includes gold producers and other resource-based companies, was the lone gainer among the index's 10 main sectors, rising 0.7 percent.

It was 0.2 percent lower at 1.1310 francs, compared with highs of 1.1537 francs hit a week ago. The dollar was down 1.2 percent at 0.9627 Swiss francs, while an ounce of gold was 1 percent higher at $1,275. "But we're in a low inflationary environment, which can help valuations remain elevated for longer than they would otherwise".

The dollar pulled back against the euro and other currencies after the Consumer Price Index rose a tame 0.1 percent in July.

U.S. Treasury long-dated yields dropped to six-week lows, pressured by U.S. The 30-year bond was last up 4/32 in price to yield 2.7871 per cent, from 2.794 per cent late on Thursday.

USA crude rose 0.41 per cent to US$48.79 per barrel and Brent was last at US$52.01, up 0.21 per cent.

Related news:

Hot News

Chelsea boss Antonio Conte does not want sympathy over squad size
Aug 12, 2017 - 13:23
They've brought players in but I think he wants more because now they're going to be competing in the Champions League as well'. Asked about what his squad needs before the end of August, Conte said: "I'm the coach of this team.

isis-killer-beheading-video-story-top Secretary Mattis says United States is 'ready' to counter North Korean threat
Aug 12, 2017 - 13:14
The Secretary spoke to reporters at the Pentagon's Defense Innovation Unit Experimental, also known as DIUx, in Mountain View. Defense Secretary James Mattis said during a August 11 press conference that a war with North Korea would be "catastrophic".

isis-killer-beheading-video-story-top Guardiola forecasts end to City spending spree
Aug 12, 2017 - 13:09
The pressure it's never a big problem. "It's the same pressure as I had last season". We will change one important player, it depends on who we are going to stay.

isis-killer-beheading-video-story-top North Korea vows harsh retaliation against new United Nations sanctions
Aug 12, 2017 - 12:54
But Wang, the Chinese envoy, cast Ri's presence in Manila as a positive, enabling him to "hear the voices from other sides". But there were no signs the USA would acquiesce to China's call for a quick return to negotiations.

isis-killer-beheading-video-story-top US Navy destroyer challenges Beijing in South China Sea
Aug 12, 2017 - 12:54
Interaction between the Chinese and U.S. ships was " safe and professional ", according to an unnamed United States official. China's Defence Ministry said it expressed its strong opposition to the United States for the "show of force".

isis-killer-beheading-video-story-top Pentagon denies civilians killed in Afghanistan airstrike
Aug 12, 2017 - 12:47
A spokesman for the US military in Kabul said officials were aware of the reports but would not comment immediately. All the victims, which included women and children, were civilians and they were from one family.

North Korea's Nuclear Weapons Program Has Grown With Each Kim Regime
Aug 12, 2017 - 12:35
But it wasn't known until now that the contacts have continued, or that they have broached matters other than USA detainees. USA bombers have flown over the Korean Peninsula several times to show American strength after Pyongyang's missile tests.

isis-killer-beheading-video-story-top Five reasons to love the Michael Beasley signing
Aug 12, 2017 - 12:21
After the Miami Heat selected him with the No. 2 overall pick in the 2008 NBA Draft, Beasley was named to the NBA All-Rookie First Team.

isis-killer-beheading-video-story-top Cavs' Kyrie Irving Prefers Trade To Clippers Over Spurs, Knicks, & Heat?
Aug 12, 2017 - 11:38
This saga will continue as the National Basketball Association revealed small pieces of next season's schedule this past week. Irving, who is an NBA Champion and multiple-time All-Star, has two years or so left before he's officially an NBA free agent.

isis-killer-beheading-video-story-top Back nine show ensures Lahiri makes cut at PGA Championships
Aug 12, 2017 - 11:23
It's not like I'm hitting the ball crooked". "I'm probably not playing as well as I did at the end of past year ", Matsuyama said. He took two shots to get out of the sand and two more to find the green from the primary rough before two-putting for a 7.

isis-killer-beheading-video-story-top Bills Send Sammy Watkins To The Rams
Aug 12, 2017 - 11:08
Roseman, the Eagles' executive vice president of football operations, said the trade was the most hard he's ever had to make. Buffalo tapped Watkins fourth before Mike Evans went seventh to Tampa Bay and Odell Beckham Jr . went 13th to the Giants.

Jose Mourinho believes Manchester United can win the Premier League this season
Aug 12, 2017 - 10:47
We got a central midfielder, a striker, obviously the 25% would be for a player from the sides, but we have players. He has put his trust in me and in my work, and I was very grateful to him".

isis-killer-beheading-video-story-top Possible Date For Ronda Rousey's Next WWE Appearance
Aug 12, 2017 - 10:46
The former UFC Women's Bantamweight champion has had fairly good relations with Triple H, Stephanie McMahon and the WWE. Flair, Bayley, and Lynch had a confrontation with all four of the MMA Horsewomen, with Banks joining them on Facetime.

isis-killer-beheading-video-story-top Bills trade WR Watkins to Rams, acquire WR Matthews
Aug 12, 2017 - 10:44
The Bills also dealt wide receiver Sammy Watkins , a former top draft pick, to the Los Angeles Rams for cornerback E.J. His skillset also meshed well with that of Tyrod Taylor , a player who, this summer, nearly became an ex-Bill himself.

Range Resources Corporation (RRC) Sets New 12-Month Low on Analyst Downgrade
Aug 12, 2017 - 09:21
BidaskClub cut Range Resources Corporation from a "hold" rating to a "sell" rating in a research note on Tuesday, July 25th. Advantus Capital Management Inc increased Scana Corp (NYSE:SCG) stake by 7,680 shares to 35,192 valued at $2.58M in 2016Q4.