Sabre Rattling Between States and North Korea Shake Markets

Wall Street Expected to be Cautious

Geo-political turbulence between the United States and North Korea has increased tenfold in the past twelve hours, as sabre rattling has become loud between the two nations. The U.S Dollar has gained swiftly against many major currencies on safe haven trading. Wall Street finished trading on Tuesday with losses and caution is likely to prevail again today if political rhetoric stays emboldened. President Donald Trump is likely to be a focal point for investors today after his ‘fire and fury’ comments yesterday.

Yen Spikes Higher on Safe Haven Buying

Japanese and Korean equities have sunk this morning as military rhetoric has ignited between the U.S and North Korea. The Nikkei and Kospi Indexes have seen dramatic losses this morning. Nervous short term sentiment has also created strength for the Yen, which acts historically as a safe haven currency for Asian investors. Consumer Price Index results from China were slightly below their estimates this morning.

Short Term Volatility Expected

European equities rose in value yesterday, but global anxiety may create rather tentative trading conditions early today. The Euro and Pound have dropped in value as investors have sought traditional safe-havens. German and French Trade Balance numbers showed improvement yesterday. Italian Industrial Production numbers will be released today.       

Gold Gains as a Refuge

Gold will get plenty of attention today. In early trading the precious metal has gained as traders have become risk adverse and sought refuge. If heightened political tensions between North Korea and the U.S continue in the near term, Gold is certain to be volatile if speculative positions increase.

Yaron Mazor is a senior analyst at SuperTraderTV.

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