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Political tensions in Korea dominate sentiment

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The FTSE was down around 80 points this morning as we see heightened political tension in the Korean Peninsular with North Korea firing a ballistic missile over Japan into the Pacific ocean, undermining US attempts to bring North Korea’s Kim Jong-un to the negotiating table.

Spreadex Analyst, Connor Campbell commented “the event in and of itself is enough to have seriously spooked the European indices. The FTSE, DAX and CAC all plunged 1% after the bell – that leaves the UK index just above 7300, the German index barely above 12020 and their French cousin around 5030.”

“This has understandably seen an overnight preference for safe havens” added Accendo Markets Analyst, Mike van Dulken, “such as Gold, the Swiss Franc, Japanese Yen and Bonds, at the expense of equities with Asian bourses which are firmly in the red after a mixed close on Wall St.”

The major European currencies continue to benefit from dollar weakness, taking their cue from Fed Chair, Janet Yellen’s lacklustre speech in Jackson Hole last week. ADS Securities Analyst, Konstantinos Anthis commented “As traders return to their desks after yesterday’s UK holiday, the bias is against the US currency as the lack of clarity from Yellen and the Fed on any immediate steps to normalize their balance sheet casts doubts on the dollar’s outlook.”

“Some good news is needed for the dollar at this time but today’s US Consumer Confidence report is expected to print softer, highlighting the weakened consumer sentiment in the States.”

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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