Markets

Markets Live: North Korea rattles markets

In early breaking news for markets, the yen has gained, gold has pushed further through $US1300 an ounce and US stock futures are lower this morning after North Korea fired a missile toward Japan, rekindling geopolitical concerns two weeks after the US president warned that aggression would be swiftly answered.

September contracts dropped 0.6 percent as of 6:01pm in New York. An exchange-traded fund tied to the equity benchmark, ticker SPY, lurched just after 5pm, losing about half a percent in five minutes, before futures opened with roughly the same loss.

The missile probably landed off the eastern coast of Hokkaido, according to Japanese broadcasting service NHK.

“As of now, it looks like a knee-jerk reaction to a surprising piece of news,” said Frank Cappelleri, a technical analyst at Nomura Instinet. 

“So far the initial low for SPY has held. That’s important, as it shows fear has been contained for now. Similar occurrences (to other geopolitical events) have come and went without a major long-term effect the last few weeks.”

Some of the stock market’s biggest swoons have come amid anxiety over North Korea.

Japanese Prime Minister Shinzo Abe told reporters in Tokyo that the missile appeared to have passed over airspace and that the government was urgently collecting intelligence on the incident and doing everything to ensure the safety of its citizens, according to remarks broadcast on NHK.

Two weeks ago, the S&P 500 halted an unprecedented stretch of calm in American equity markets and the CBOE Volatility Index spiked to its highest since April after Trump dialed up his warning to North Korea on threats to American allies.

He said on 8th of August that North Korea will be “met with fire and fury and, frankly, power the likes of which the world has never seen before” if Kim Jong Un’s regime keeps making threats.

The yen has advanced 0.5 percent to 108.69 per dollar while gold is up 0.8 percent to $1320 an ounce.

Keep your eyes peeled for a tweet from Trump.

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