Markets slide after Trump threatens North Korea with 'fire and fury' – business live

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Investors dump shares and dash for safe havens as tensions between Washington and Pyongyang escalate, on the 10th anniversary of the financial crisis

12.28pm BST

More from Rex Tillerson, who is trying to give US citizens some early morning reassurance (it’s almost 7.30am on the East coast):

US sec of State: when Trump spoke of ‘fire and fury’ agains N Korea he wanted to deliver message to avoid any miscalculation by Pyongyang.

US sec of State: when Trump spoke of ‘fire and fury’ agains N Korea he wanted to deliver message to avoid any miscalculation by Pyongyang.

12.21pm BST

Breaking: America’s secretary of state, Rex Tillerson, has told Americans not to panic about an imminent attack from North Korea.

WASHINGTON (AP) — Tillerson: ‘I do not believe that there is any imminent threat’ from North Korea; ‘Americans should sleep well at night’

Reuters: #US Secretary of State Tillerson says Trump sending strong message to #NorthKorea in language Kim Jong Un would understand

12.15pm BST

Although European and Asian stock markets have been hit by North Korean fears today, the US stock market is expected to open fairly calmly.

The futures market suggests the Dow will fall by 30 or 40 points, so only a small dip.

Dow futures starting to reduce early falls on North Korea and US tensions.

Dow Jones mini Futures 21,998pts down 32pts or 0.15%

11.22am BST

North Korea isn’t the only thing worrying investors today

Investors are also spooked by reports that a car has ploughed into a group of French soldiers in Paris this morning.

European markets are trading in the red this morning, as the risk aversion caused by further confrontation between the US and North Korean was exacerbated heightened by another attack taking place in Paris….

A week of low volatility has been hit with an unexpected rush to safe havens as the US-North Korean feud has ratcheted up once more overnight. No sooner had Trump warned of ‘fire and fury’ in the event of further threats from North Korea, than the breakaway nation responded with exactly just such a threat, announcing plans for a potential attack on the US airbase in Guam. The unpredictable nature of North Korea means it is hard to gauge exactly how likely an attack is, yet given the military power of both nations, there is no surprise we are seeing markets shift out of risk assets and into havens such as the yen and gold.

All European equities flashing red today after #fireandfury statement.

11.10am BST

Safe money havens such as the Swiss franc have received “a booster shot” from the US-North Korea crisis, says Arnaud Masset of Swissquote Bank.

This chart shows how the ‘Swissie’ is the best-performing major currency against the US dollar today.

Swiss franc, yen jump on North Korea tension via @markets

10.50am BST

The Bank of England has also announced it will appoint a ‘conflicts of interest’ officer.

It follows deputy governor Charlotte Hogg’s shock resignation from the BoE this year, after she failed to report that her brother worked for Barclays bank.

10.24am BST

British companies are finding it harder to recruit staff, according to the latest report from the Bank of England’s agents across the UK.

But despite being in shorter supply, workers aren’t getting higher pay rises. That’s disappointing, given the recent jump in inflation.

Recruitment difficulties had edged higher, and were gradually broadening across sectors and skill areas. Despite this, labour cost growth had been modest, with pay awards clustered around 2%–3%.

10.16am BST

Just in: Greece’s inflation rate remained at 1% last month, as the country continues to claw its way out of deflation.

1%y/y consumer price inflation in Greece in July. May not sound like much, but when you consider what it was less than a year ago…

9.54am BST

The selloff is gathering pace, as worries over potential military conflict between the US and North Korea grips the markets.

Britain’s FTS 100 is now down almost 60 points at 7481, a drop of 0.8%, extending its earlier losses.

Rising tensions on the Korean peninsula are nothing new, they have been a staple for investors for several years now, but this flare-up has the potential for a policy misstep, more so because of the inexperience of the person occupying the White House, and a tendency to conduct policy by way of tweet and press conference. This may explain why financial markets have adopted a safety first approach to events over the last twelve hours.

Last night’s comments from President Trump that North Korea would face “fire and fury like the world has never seen”, if they continued to threaten the US along with their attempts to build a nuclear warhead, that could hit the western US, brought an entirely predictable counter response from Pyongyang.

9.50am BST

Hindsight’s a wonderful thing, so where should you have put your money 10 years ago as the financial sector began implode?

Deutsche Bank has the answers – the American stock market, and high-yielding US debt.

Market winners since 9 Aug 2007 in $ terms. Via Deutsche:
S&P 500 +106%
US high yield +95%
Gold +87%
DM bonds +35-80%
Dax +38%
FTSE 100 +12%

Market losers since 9 Aug 2007 in $. Via Deutsche:
Greek stocks -82%
Euro banks -54%
Portugal stocks -42%
CRB commodities index-42%
Oil -32%

9.42am BST

We won’t see a rerun of the 2008 financial crisis according to Sir John Gieve, the Bank of England’s deputy governor for financial stability between 2006 and 2009.

He told BBC Radio 4’s Today programme:

“I don’t think we’ll see a repeat of what happened 10 years ago because banks have far more capital, there are far more regulations on their liquidity and funding which was a big issue then, and of course they have spent the last 10 years dealing with the problems raised … so there isn’t the exuberance that we certainly saw then.”

“In the UK and most of the west the debt levels are more manageable now. We’ve yet to see how they will be affected by a return of positive interest rates, because we’ve had 10 years of super expansionist monetary policy and we’ve yet to see how we can get out of that.

“The main debt which threatens a sudden break is probably in the far East and China which has been running a credit binge now for a decade and is showing signs of over extension.”

9.42am BST

Here’s a neat chart, showing how world stock markets have clawed back their financial crisis losses, but anyone holding bank shares is still nursing losses.

World stocks crashed in 2007-09 then climbed to new highs.
Bank stocks crashed, and are still -40% from pre-crisis peak. Via @ritvikcarvalho

9.24am BST

Politicians have failed to obey Churchill’s advice to “Never let a good crisis go to waste”, says Torsten Bell of the Resolution Foundation.

Bell writes that there was a great opportunity to reform the economy in the 10 years since the credit crunch, but it has been missed.

After the second world war the Attlee government didn’t simply try to undo the damage of the war. From the NHS to our national parks, it used the energy from that cataclysm to build a better Britain. Franklin D Roosevelt’s New Deal wasn’t simply a response to the Great Depression, but a set of interlocking reforms aiming to build a fairer country.

The financial crisis highlighted the big challenge of our time: to ensure the economy delivers for working people. Looking back over the last decade, it’s clear we have far from delivered. With Brexit looming, a lot’s changed in our politics.

Related: We let the 2007 financial crisis go to waste | Torsten Bell

9.14am BST

Jack Lew, former US Treasury Secretary, has been reminiscing about the financial crisis to mark the 10th anniversary of the credit crunch.

“I’d never seen a situation where every single day numbers were so much different and worse than the day before that you literally had to come back and keep revisiting how much fiscal stimulus would the economy need in order to stimulate a recovery.

“We all know that crises will come in the future, what we don’t know is when and how. What Wall Street reform did was for the first time since the Great Depression gave us the ability to have tools where we could deal with an evolving financial system to have the safeguards that we need. Even before this election you saw a great pushback amongst many, saying this has gone too far.

I fear that as the memory of the Great Recession and the financial crisis start to dim, some of the simple nostrums about just clearing away regulation, start to take on salience as if the stakes were not so high in 2007/2008.

9.07am BST

Overnight, the Bank of England has warned that the task of regulating the City after Brexit will put a strain on its ability to police the financial sector.

Like to know more? Let us know what you’d like answered and we’ll do the rest….

8.55am BST

The rising US-North Korean nuclear tensions have dampened appetite for risky assets like equities and industrial commodities, says Mike van Dulken of Accendo Markets.

Instead, safe assets like gold, silver, bonds, the Japanese Yen and the Swiss Franc are in demand, he adds.

I think it’s safe to say nuclear worries > china inflation data

8.45am BST

One City worker reports that senior investors are taking steps to protect themselves from the risks of conflict between the US and North Korea

Spotted: a couple of very senior European PMs getting coffee earlier than usual. today’s task – Trump proofing portfolios.

8.31am BST

European stock markets are a sea of red in early trading, with the main indices down around 0.5%.

The geopolitical tensions have prompted a risk off trade amid investors. President Trump’s comments about North Korea have created nervousness and the fear is if the president really means what he said “fire and fury”.

8.23am BST

The Japanese yen has hit an eight-week high against the dollar, as geopolitical worries hit the Asian markets.

“The market had been complacent for a while regarding headlines from North Korea. So it reacted when the North threatened Guam,

“Few participants, however, think that North Korea would actually strike Guam at this juncture. So the impact is likely to fade eventually.”

8.15am BST

Trump’s warning to North Korea also sparked a late sell-off on Wall Street last night.

That meant the Dow Jones industrial average couldn’t hit its 10th record high in a row.

Increased geopolitical tensions after a war of words between US and North Korea dampened global risk sentiment

This saw the DJIA snap it’s 9-day streak of record closes, softness in Asia-Pac equities and a flight to safety in FX markets

8.01am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

There’s an old saying in the markets that you should “buy at the sound of cannons”.

“North Korea best not make any more threats to the United States. They will be met with fire and the fury like the world has never seen.”

“I don’t have the slightest doubt that the RVs on these missiles are working,” said Jeffrey Lewis, the director of the East Asia nonproliferation programme at the Middlebury Institute of International Studies at Monterey.

“That’s done. We’re there. North Korea can put a nuclear weapon on New York City.”

Related: Donald Trump vows to answer North Korea nuclear threats with ‘fire and fury’

Related: Donald Trump vows to answer North Korea nuclear threats with ‘fire and fury’

Our European opening calls:$FTSE 7509 -0.45%
$DAX 12217 -0.61%
$CAC 5185 -0.66%$IBEX 10668 -0.62%$MIB 21899 -0.68%

North Korea has been a worry simmering in the background for a long time but with its more advanced weapons and Trump ready to act in the White House, it could bubble over anytime.

The threat from North Korea seems to have jolted investors out of their summer slumber.

Related: Credit fears hit global markets

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Source: north-korea
Link : Markets slide after Trump threatens North Korea with ‘fire and fury’ – business live


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