Geo-political tensions between North Korea and the US could escalate following President Trump’s comments that the recent UN sanctions against North Korea were a “very small step”. How will Donald Trump North Korea Sanction comments impact markets further today?
13 September, FxPro - US equities closed at record levels on Wednesday, as improved risk-on sentiment returned to the markets and news that the US economy will benefit if the US tax reform is passed. US Treasury Secretary Mnuchin stated on Tuesday that “tax reform could be backdated to January 1st, 2017 as it would be a “big boon for the economy.”
He also commented that the Trump administration was “super focused” on ensuring tax reform would be completed by the end of the year. Such comments helped the supported rise in US Treasury Yields. On Wednesday, Asian equity markets reached a 10-year high.
Will Donald Trump North Korea Sanction comments impact markets?
Although, the markets remain cautious that geo-political tensions between North Korea and the US could escalate following President Trump’s comments that the recent UN sanctions against North Korea were a “very small step” and “nothing compared to what ultimately will have to happen” to deal with North Koreas’ nuclear program.
Following the recent sanctions, North Korea has vowed to redouble its efforts to fight of the threat of a US invasion. With continued rhetoric, markets will remain on edge and will ultimately look to safe havens. UK Consumer Price Index was released on Tuesday, showing increasing UK inflation rising to 2.9% (YoY) in August.
GBPUSD reached a 1 year high on the news. Inflation above the Bank of England’s target of 2% has been complicating why policy makers are not raising UK interest rates. With a Bank of England Policy meeting being held on Thursday, the markets are looking for clues as to the likely timing of rate hikes.
13 September Forex and Commodity Markets Outlook
EURUSD edged higher overnight to currently trade around 1.1980.
USDJPY moved higher with improved risk-on sentiment. Currently, USDJPY is trading around 110.15.
GBPUSD benefitted from, higher than expected, UK inflation data. Currently, GBPUSD is trading around 1.3300.
Gold lost ground against USD and currently trades around $1,330.
WTI was trading in a narrow range ahead of today’s EIA report. Currently, WTI is trading around $48.70.
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