There’s little surprise as to what is driving trading this morning.
North Korea’s latest nuclear naughtiness has sent another ripple of fear through the markets this Monday – as has the US threat of a ‘massive military response’ and South Korea’s own show of (simulated) force. However, with the increasing regularity of such tests, and the USA’s Labor Day holiday, the edge has been taken off the European losses.
The FTSE slipped 10 to 20 points after the bell, still managing to keep above that 7400 level it finally re-crossed last Thursday. The oil and mining stocks quickly overcame their early redness, while the likes of Randgold Resources (LON:RRS) and Fresnillo (LON:FRES) rose anywhere between 1.5% and 2.5% as gold surged 1% to a fresh 10 month peak.
As for sterling, the pound ducked below $1.295 against the dollar, while falling 0.3% against the euro (which also jumped 0.2% against the greenback) as the eurozone currency looked to recovery some of last week’s losses.
While trading-nuance seems unlikely this Monday there is one piece of important UK data to try and break through the North Korea malaise: August’s construction PMI. Analysts are expecting the figure to rise from 51.9 to 52.1 month-on-month, something that could spur sterling into action.
Elsewhere the DAX and CAC fell 0.5% and 0.4% respectively. The eurozone indices aren’t only being affected by the North Korea situation, but the euro’s early rebound (with Thursday’s ECB meeting arguably the highlight of the week’s economic calendar).
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