US stocks close lower after President Trump's remarks to North Korea

Xavier Trudeau
Août 12, 2017

In a note to investors, Paul Christopher, head global market strategist, and Tracie McMillion, head of global asset allocation, suggest, "the threat of a nuclear weapon is certainly more serious than previous threats, but that threat also may increase the probability of a diplomatic solution". The contract shed 22 cents on Tuesday to close at $49.17.

Although Japan could be in the front line of any clash with North Korea, the yen is benefitting because Japan is the world's biggest creditor nation and Japanese investors tend to repatriate funds in times of stress, attracting other flows.

Tokyo's benchmark Nikkei 225 index dropped 1.29 percent, or 257.30 points, to end the day at 19,738.71 while the Topix index of all first-section issues fell 1.07 percent, or 17.42 points, to 1,617.90.

Ongoing tensions between North Korea and the United States weighted on stock markets once again Friday.

The Canadian dollar was trading at an average price of 78.67 cents US, down 0.04 of a USA cent.

Sterling touched a three-week low against the dollar as mixed output and trade data did little to alter investors' downbeat view of an economy struggling to meet Bank of England targets.

The market's main backstop in times of strain, gold, hit a two-month high of $1,282 an ounce amid the nervousness.

Paris stocks endured a torrid session to end 1.4 per cent down after a suspected terror attack in France.

The Japanese yen strengthened by 0.5% to about 109.70 per dollar. Germany's DAX fared better, trading only 0.2 percent lower at 11,989.

Markets are now awaiting USA consumer price data for July, due later today.

The dollar index fell 0.32 per cent, with the euro up 0.42 per cent to US$1.1819. The franc was up 1.1% against the dollar at SF0.9639 and was 1.2% higher vs the euro at SF1.1311.

Below that level lies another key technical chart support level for the dollar at 108.13 yen, a trough the US currency k plumbed in mid-April.

The yield on the 10-year Treasury bond fell to 2.2% and is approaching its lowest level of the year.

"This inflation data for the month was not good".

Data showed USA producer prices unexpectedly fell in July, recording their biggest drop in almost a year, while another set showed the number of Americans filing for unemployment benefits unexpectedly rose last week.

Gold has risen to its highest level in nearly two months, while the Swiss franc has powered against the U.S. dollar and seen its biggest one-day gain against the euro in more than two and a half years.

The Labor Department said on Friday its Consumer Price Index edged up 0.1% in July, which was below the 0.2% rise expected by economists polled by Reuters. Brent crude, used to price global oils, added 26 cents to $52.96.

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