Stocks Tank as Trump, North Korea Exchange Barbs

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Stocks Tank as Trump, North Korea Exchange Barbs

The Swiss franc gave up some gains (http://www.marketwatch.com/story/swiss-franc-gives-up-some-gains-as-investors-monitor-us-north-korea-standoff-2017-08-10), as the USA dollar was flat across the board.

While North Korean geopolitical risks are likely to weigh on Asian markets for now, investors are expected to shift their focus to monetary policy into the end of the week, IG market strategist Jingyi Pan said in a note.

Following Trump's remarks, North Korea on Wednesday said it was "carefully examining" plans for a missile attack on the US Pacific territory of Guam, which is home to a large US military base.

President Donald Trump promised "fire and fury and frankly power, the likes of which this world has never seen before" on Tuesday evening in response to recent threats from North Korea and its leader Kim Jong Un. "This is extremely getting on the nerves of the infuriated Hwasong artillerymen of the KPA".

Tokyo's Nikkei 225 share index closed down 1.3 percent at its lowest since June 1 as the strong yen hit exporters, while South Korea's KOSPI index fell 1.1 percent to seven-week lows.

US trading volume has been low with summer setting in and Congress expected to be in recess until September 5.

Although the City isn't panicking, it is certainly watching the situation closely.

"The typical text book trade is that investors rush for safe havens".

"North Korea doesn't seem like they're going to back down and the United States has also made a very strong stance this time". The CBOE Volatility Index, also known as Wall Street's "fear gauge", jumped 15 percent to approach a two-month high.

The Standard & Poor's 500 index fell 10 points, or 0.4 percent, to 2,463.

The Swiss franc USDCHF, -0.8829% bought $1.0382 on Wednesday, representing a 1.2% rise from $1.0266 late Tuesday in NY. The Dow Jones industrial average fell 204.69 points to close at 21,844.01, with Goldman Sachs contributing the most losses. The pan-European STOXX 600 index ended down 1pc at 376.05, after touching 375.42, its lowest level since March 28 as basic resources and banks fell. "So we're not going to get to a year-over-year number of 2-percent until some of these very low readings drop out of the statistics 6 to 10 months from now".

The 30-year bond last rose 5/32 in price to yield 2.8107 per cent, from 2.818 per cent late on Wednesday.

In a note sent to clients late on Thursday, the United States bank predicted the single currency would rise to $1.25 in the first quarter of next year and reach parity with sterling for the first time. Euro zone blue chips slipped 1.1pc.

IG's opening calls suggest that the FTSE 100 will start the day 0.45 percent lower at 7,509 points. They soared over 2 percent in the previous two sessions, and are set for a weekly gain of 2.2 percent. Hong Kong's Hang Seng was off 0.3 percent. TripAdvisor shares shed $1.75, or 4.4 percent, to $37.80. Humana rose $3.41, or 1.4 percent, to $253.63.

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