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9 August 2017
 |
| financial markets (The Total Investment & Insurance Solutions) |
Worries over a potential confrontation between the United States and
North Korea weighed heavily on global stock markets on Wednesday but helped
boost the price of assets, such as gold and the Swiss franc, that are
considered safe havens in times of geopolitical peril.
KEEPING SCORE: In Europe, France's CAC 40
fell 1.6 percent to 5,135 while Germany's DAX was down 1.3 percent at 12,133.
The FTSE 100 index of leading British shares was 0.7 percent lower at 7,489.
Wall Street was poised for further losses at the opening bell, with Dow futures
and the broader S&P 500 futures down 0.3 percent. The Total Investment & Insurance Solutions
KOREA JITTERS: With President Donald Trump
warning North Korea of "fire and fury," investors have become
concerned that the war of words between Washington and Pyongyang could spiral
out of control. Pyongyang said it was examining plans for attacking Guam, a
U.S. territory in the Pacific with a military base. The comments follow reports
that the North has mastered a technology needed to strike the United States
with a nuclear missile. The Total
Investment & Insurance Solutions
ANALYST TAKE: "We're seeing significant
risk aversion in the markets on Wednesday, with the escalation in tensions
between the U.S. and North Korea triggering moves into safe haven assets,"
said Craig Erlam, senior market analyst at OANDA. The Total Investment & Insurance Solutions
SAFE HAVEN FLOW: The most traditional safe havens
at times of mounting geopolitical unrest are the Swiss franc and the gold, and
both were big movers on Wednesday. The dollar was down 1.2 percent at 0.9627
Swiss francs, while an ounce of gold was 1 percent higher at $1,275.
ASIA'S DAY: The earlier Asian session was
heavily influenced by the sabre-rattling between the U.S. and North Korea.
Tokyo's Nikkei 225 tumbled 1.3 percent to 19,738.71 while Seoul's Kospi fell
1.1 percent to 2,368.39. The Shanghai Composite Index lost 0.2 percent to
3,275.57 and Hong Kong's Hang Seng was off 0.3 percent at 27,757.09. The Total Investment & Insurance
Solutions
FED WATCH: As well as monitoring the
geopolitical backdrop, investors are looking ahead to an appearance Thursday by
Bill Dudley, president of the U.S. Federal Reserve Bank of New York, for signs
of the Fed's outlook on the economy. They are looking for confirmation that the
Fed is sticking with plans for a possible December interest rate hike. The Total Investment & Insurance
Solutions
CURRENCIES: The euro was down 0.1 percent at
$1.175 while the dollar fell 0.6 percent to 109.68 yen. The Japanese currency
is often a safe have asset too.
ENERGY: Benchmark U.S. crude added 28 cents
to $49.45 per barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, used to price international oils, gained 40 cents to $52.54 in
London.The Total Investment &
Insurance Solutions
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