Missile launch
Geopolitical tensions were rekindled after North Korea launched a missile that flew over Japan before crashing into the sea. The market reaction to the test was a sharp rush into haven assets,
which saw the yen and gold rallying, while the yield on 10-year U.S.
Treasuries dropped below 2.1 percent for the first time since November.
Following the initial reaction in Asia markets, investors are now looking to any official response from the U.S., China or Japan before making their next move. President Donald Trump had not tweeted about the incident as of 5:30 a.m. Eastern Time.
Another hit from Harvey
The
latest status on the weather event that caused so much destruction in
Texas over the weekend shows that Harvey has moved back over the Gulf of
Mexico and is likely to make landfall again tomorrow on the Texas-Louisiana border. With estimates for damage wrought by the storm rising to as high as $100 billion, President Trump has promised swift funding
to meet the needs of the region ahead of a planned visit to the area
today. In markets, the biggest effect is still being felt in gasoline
futures, which gained another 1.7 percent this morning. A barrel of West Texas Intermediate for October delivery is trading at around $46.64.
Brexiting bad
European
Commission President Jean-Claude Juncker said at a press conference
this morning that none of the U.K. position papers published ahead of
the latest round of talks on Britain’s exit from the EU are satisfactory.
Those comments will likely add to an already-tense atmosphere at the
talks, with the EU’s chief negotiator, Michel Barnier, yesterday airing
his frustration over the ambiguity of Britain’s position. The pound
dropped to 1.0759 per euro in trading this morning.
Markets drop
Much
of an early-session selloff caused by the North Korean missile launch
unwound during Asia trading, with the MSCI Asia Pacific Index decreasing 0.2 percent and Japan’s Topix index closing 0.2 percent lower. In Europe, the Stoxx 600 Index was down 1.4 percent as of 5:40 a.m. while S&P 500 futures lost 0.7 percent. Gold rallied to the highest level of the year.
Data, earnings due
Today sees U.S. S&P CoreLogic house price data released at 9:00 a.m., with consumer confidence numbers for August due to be published at 10:00 a.m.
It’s also a big earnings day north of the U.S. border, with two of
Canada’s biggest lenders – Bank of Nova Scotia and Bank of
Montreal -- reporting quarterly results today.