Trump on North Korea; Google scandal; Trouble at Snap

Ivan Schwartz
August 12, 2017

Another source of support to bullion was data showing USA producer prices unexpectedly fell in July, pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.

Reuters data show a 22 per cent perceived chance for a rate increase after the Fed's December meeting. The Aussie dollar recoiled 0.5 per cent on its USA counterpart to US$0.7872 and touched a three-week trough at one point. And in a Friday morning post on social media site Twitter, Trump wrote: "Military solutions are now fully in place, locked and loaded, should North Korea act unwisely".

Nervous trading marked the 10th anniversary of the start of the financial crisis on Wednesday, after Donald Trump's warning that North Korea faced "fire and fury like the world has never seen" if it continued to make threats against the US.

"U.S. markets had previously been becalmed amidst the Goldilocks scenario of strong profit growth, low interest rates and full valuations".

CURRENCIES: The euro was down 0.1 percent at $1.175 while the dollar fell 0.6 percent to 109.68 yen.

The Nasdaq Composite was up 19.35 points, or 0.31%, at 6 236.22. The UK trading session took USD/CHF lower to hit a day low of 0.9630 towards the closing bell, but closed up slightly on the day by 0.03%.

At the moment stock falls have not been too dramatic - the bluechip index is at a higher level than it was a week ago.

"Pretty remarkable, perhaps even extraordinary, considering", said Tim Ash, strategist at fund manager BlueBay.

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Asian shares, USA stock futures, dollar slip on rising Korean tensions
The next key data on focus will be tomorrow's CPI figures which should shed more light on the path of the U.S. inflation. Amid the hot rhetoric, USA stocks sold off sharply on Thursday, with the S&P 500 falling more than 1 percent.

Despite the risk-off attitude in the market, stocks in NY were taking back some losses at the London equities close, as bargain hunters entered the market following steep falls in United States stock indices earlier this week.

Global political tensions have seen investors sell off shares as they flee to less risky assets such as the yen and the Swiss franc.

The dollar weakened against the yen, which is often sought in times of geopolitical tension.

The Korean won continued to fall versus the dollar, down 0.13 percent to 1,143.5 on Friday for a 1.6 percent decline on the week. Major European markets sank in early trade Thursday after the Dow recorded its second straight negative close Wednesday, although the dollar firmed against the pound and euro ahead of United States inflation data Friday.

The data comes amid tepid inflation that has remained below the Fed's 2% target, despite low unemployment.

The S&P 500 dropped 1.4% to 2438.21, while the Dow Jones Industrial Average fell 204.69 points, or 0.9%, to 21,844.01.

Sterling was last trading at US$1.3007, up 0.25 per cent on the day.

U.S. Treasury yields US10YT=RR fell to as low as 2.197 percent, their lowest level since June 28, overnight. 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.

Other reports by GizPress

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