Futures lower amid mounting tensions between USA, N. Korea (DIS, NFLX, PCLN)

Gladys Abbott
August 10, 2017

US Defense Secretary Jim Mattis, who often has emphasized the devastating costs of any conflict with North Korea, seemed to back up Trump's tone.

The VSTOXX, Europe's main gauge of equity market investor anxiety, stirred to reach its highest level in two weeks, though still remained at subdued levels, while its US counterpart - the Vix - touched a one-month high. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5 percent, while Japan's Nikkei lost 1.3 percent as the stronger yen sapped investor appetite.

The dollar index, which tracks the greenback against six rival currencies, was up 0.07 percent to 93.717, after rising as high as 93.888 earlier in the session.

"Obviously we are looking at the increased tensions between the U.S. and North Korea", said Brad Bechtel, managing director FX at Jefferies in NY.

Gold climbed to its highest point since mid-June, pushing up mining-company shares amid military tensions between the United States and North Korea.

The price of oil was also 0.3% ahead at 52.29 United States dollars a barrel, with stockpiles coming under pressure from falling crude oil imports and record processing at American refineries.

"Saber-rattling between two of the world's least predictable leaders caused a wave of risk aversion to wash over global markets, fueling demand for traditional safe harbors", said Joe Manimbo, senior market analyst at Western Union Business Solutions. The dollar is down 0.21% against sterling at the time of writing and down 0.27% against the Japanese yen.

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Japan is the world's biggest creditor nation and there is an assumption Japanese investors may repatriate their foreign holdings in times of heightened global uncertainty. Netflix lost 1.5 per cent.

The Swiss franc was on pace for its biggest single-day rise against the euro since the Swiss National Bank removed its cap on the currency in January 2015. The euro edged down to $1.1726 from $1.1751.

Yields on core government debt fell.

"The most visible impact of escalating verbal threats between North Korea and President Trump comes at the long end of the US Treasury curve", said Jim Vogel, interest rates strategist at FTN Financial in Memphis.

In commodities, crude oil lost momentum after rising overnight on data pointing to declining USA inventories.

Gold was up USD8 at USD1287 an ounce, helped by its safe haven appeal to its highest in two months. Sydney's S&P-ASX 200 gained 0.5 percent to 5,773.70 while Manila, Malaysia and Jakarta also rose. The contract shed 22 cents on Tuesday to close at $49.17.

The Labor Department said USA job openings, a measure of labor demand, jumped to a record high in June and was at the highest level since December 2000.

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