FTSE slumps as Trump ramps up North Korea rhetoric

Lloyd Doyle
August 13, 2017

Toyota rose 0.69 percent to 6,279 yen while Sony fell 1.25 percent to 4,347 yen and Panasonic was off 0.87 percent to sit at 1,473.5 yen.

The dollar weakened after news that USA producer prices unexpectedly fell in July, recording their biggest drop in almost a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.

In Japan, core machinery orders dropped 1.9% on month in June, well below the 3.7% gain seen and fell at 5.2% pace annually compared to a 1.0% drop seen. The S&P 500 fell 1% Thursday but is still up around 9% so far this year. While machinery orders are regarded to be a volatile metric, they could influence market sentiment.

The euro was 0.14 percent higher against the dollar.

Stocks around the world fell sharply on Thursday and investors moved into the yen, gold and other safe-haven assets amid more aggressive talk between the United States and North Korea.

Risk appetite deteriorated further later in the USA session on Thursday as USA equities remained under pressure. "Risk aversion is still very much a concern for markets", said Shaun Osborne, chief currency strategist at Scotiabank in Toronto. The Swiss franc ceded some ground after soaring in the Wednesday session, with the greenback last standing at 0.9645 Swiss francs after fetching as little as 0.9629 overnight.

The yield on the 10-year U.S. Treasury note fell to 2.211%, according to Tradeweb, from 2.246% on Wednesday as prices rose.

Yields on 10-year Bunds have dropped -1.3 bps to +0.46% in early European trading, while U.S 10-year Treasuries have declined -1 bps to +2.25% ahead of their session.

Gold prices eased slightly after rising to their highest levels in more than two months on safe haven demand.

USA gold futures for December delivery rose 0.2 percent to $1,291.80 per ounce.

"What has changed this time is that the scary threats and war of words between the U.S. and North Korea have intensified to the point that markets can't ignore it", said Shane Oliver, head of investment strategy at AMP Capital in Sydney, as quoted by Reuters.

Dean Foods Co.'s stock plunged 21 percent after reporting earnings in the second-quarter that were way below investors' expectations. The blue-chip CSI300 was unchanged, while the Shanghai Composite Index dipped -0.2%.

The declines have jolted markets from a period of calm, when stock indexes around the world climbed to records and volatility remained historically low.

Old Mutual reported a pretax profit of GBP940.0 million for the six months to June 30, up 76% from GBP534.0 million the prior year.

A separate report from the Labor Department showed an unexpected uptick in initial jobless claims in the week ended August 5th. Those include Japan Post Bank, as well as Hong Kong-listed MTR and China Mobile. Netflix was down 1.8 percent.

Other reports by Iphone Fresh

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