Difficult to imagine two more volatile leaders.
The Presidents of North Korea and the United States are not the type to sit back and just allow things to happen.
Despite clear warnings from President Trump, Kim Jong-un authorised the test of a medium range ballistic missile yesterday. The fact that it failed simply meant that the wait for North Korea to become a nuclear power will go on a bit longer. How the US will react is unclear but it is doubtful we will have to wait long to find out.
Vice-President Mike Pence is in South Korea and commented “the era of patience with North Korea is at an end.”
In a currency market thinned by the Easter holiday, the JPY rose to a five-month high against a subdued dollar.
Reaction from traders will be clearer once the market gets back to normal tomorrow.
“Even turning water to wine won’t improve my poll results.”
Bringing a slightly light-hearted attitude to the French Presidential Election, a marginal centrist candidate poured scorn on opinion polls yesterday.
Using a very topical religious metaphor, Jean Lassalle was colourful in his description of opinion polls. He is confident that despite polling between 0.5% and 1%, he will contest the runoff on May 9th with right wing candidate, Marine Le Pen.
Thus starts the final week of campaigning before the first ballot on April 23rd.
Opinion polls place Ms Le Pen neck and neck with the charismatic Emmanuel Macron with Francois Fillon and Jean-Luc Mélenchon two percentage points back.
The euro is drifting ahead of the return to work of the majority following the Easter break. It is managing to hold onto the 1.0600 level but any shocks in polls this week will see it sold off. The effect on the market of Macron and Le Pen being the runoff candidates is difficult to predict.
Voting intentions from other candidate’s supporters are not allowed to be published. It is rumoured that Mélenchon will call upon his supporters to abstain on May 7th.
A week set to be dominated by politics and diplomacy
A week that will see very little in the way of economic data looks set to be driven by events in North Korea, France and Turkey.
Turkey voted, by a narrow margin, to change its constitution to allow its President greater powers. President Erdogan can now do away with several checks and balances designed to keep the legislature in line. He now has the power to “hire and fire” judges. This is perhaps the most significant part of the legislation as this means he can now influence the judiciary.
Turkey’s position both geographically and diplomatically provides huge influence. The escalation of events in Syria, coupled with Turkey openly fighting its Kurdish enemies in the north, unresolved issues with Russia, and the continuing migrant crisis.
It is unclear just how sure Erdogan is of his support from the military. There was a coup attempt in July last year. So far, the opposition has remained tight lipped over the referendum result but that can change in a heartbeat.