North Korean Threats Rattle Global Markets
September 22 2017 - 4:04AM
Dow Jones News
By Georgi Kantchev and Lucy Craymer
Global markets were down Friday after fresh threats from North
Korea revived the geopolitical fears that engulfed markets earlier
this month.
The Stoxx Europe 600 fell 0.2% in the early minutes of trading,
dragged down by falls in the financial and resources sectors.
Bourses across Asia were also flashing red. On Wall Street, futures
pointed to a 0.2% opening loss for the S&P 500.
North Korean Foreign Minister Ri Yong Ho said late Thursday in
New York that the country may consider a nuclear test of
"unprecedented scale" in the Pacific Ocean.
Those comments came after North Korean leader Kim Jong Un said
he was considering the "highest level of hard-line countermeasure"
in response to President Donald Trump's warning that the U.S. would
annihilate North Korea if forced to defend itself or its
allies.
This was likely causing investors to be "antsy heading into the
weekend, " said Emmanuel Ng, an analyst at OCBC Bank.
Havens got a boost following the North Korean threats. The
Japanese yen and the Swiss franc both advanced against the dollar,
by 0.5% and 0.3% respectively, and gold rose 0.5%.
The geopolitical tensions overshadowed investors' focus this
week on the Federal Reserve's next moves. The central bank
suggested Wednesday that it was open to the possibility of an
interest-rate increase in December.
Weak inflation numbers in recent months had made some investors
skeptical the Fed would raise rates again in 2017. But after the
Fed meeting Wednesday, investors now see a 75% chance of a rate
rise by the end of the year, according to Fed-fund futures tracked
by CME Group.
On Friday, 10-year Treasury yields were down at 2.257% from
2.278% on Thursday, with yields moving inversely to prices. The WSJ
Dollar Index, which tracks the dollar against a basket of 16
currencies, was down 0.2%.
Investors were also looking to a key speech on Brexit by U.K.
Prime Minister Theresa May on Friday and the German election on
Sunday.
In Japan, gains in the yen sent the Nikkei Stock Average down
0.3% as a stronger currency would hurt the country's key export
stocks. Hong Kong's Hang Seng was down 0.7%, while in South Korea
the Kospi fell 0.8%.
In commodities, Brent crude rose 0.2% to $56.21 a barrel ahead
of a meeting by members of the Organization of the Petroleum
Exporting Countries on Friday.
Write to Georgi Kantchev at georgi.kantchev@wsj.com and Lucy
Craymer at Lucy.Craymer@wsj.com
(END) Dow Jones Newswires
September 22, 2017 03:49 ET (07:49 GMT)
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