ibusinesslines.com
ibusinesslines.com October 20, 2017


TSX closes 143 points lower, gold rises amid US-North Korean tensions

12 August 2017, 12:26 | Jodi Jackson

The dollar skidded to an eight-week low against the yen on Friday as escalating tensions between the United States and North Korea triggered yet more investor flight to safety.

Trump ratcheted up his rhetoric against North Korea and its leader on Thursday, warning Pyongyang against attacking Guam or U.S. allies after it disclosed plans to fire missiles over Japan to land near the U.S. Pacific territory.

The S&P 500 dropped the most since May and MSCI's gauge of stocks across the globe lost 1.1 percent in its third straight day of declines, as it pulled further back from all-time highs. Trading was thinner than usual, with Japanese markets closed for a public holiday.

Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose $3.40, or 0.26%, to $1,293.37 a troy ounce.

"Of course it's all come at a time when share markets are due for a correction so North Korea has provided a flawless trigger". "Hopefully Kim Jong Un will find another path!"

There were falls of almost 2% on South Korea's Kospi and Hong Kong's Hang Seng, with markets in mainland China and Australia also down - taking their cues from sharp losses on Wall Street earlier.

Copper traded at $2.912, down 0.25%, while natural gas tacked on 0.23% to $2.991. The Shanghai Composite Index lost 0.2 percent to 3,275.57 and Hong Kong's Hang Seng was off 0.3 percent at 27,757.09.

In an apparent response to Trump's tweet, a statement issued by North Korea's official KCNA news agency claimed the president is "driving the situation on the Korean peninsula to the brink of a nuclear war". These ranged from an investigation into Russia's possible interference in the 2016 US presidential election, to concerns about China's risky debt levels, to stubbornly low inflation in the U.S.

The CBOE Volatility Index, better known as the VIX and the most widely followed barometer of expected near-term stock market volatility, rose the most in about 12 weeks.

Japanese markets were closed for a holiday, but the tense mood dragged Asian shares lower and an MSCI index of stocks across the globe .miwd00000pus was on track to post its largest weekly drop since the week before Donald Trump won the US presidential election in November.

Below that level lies another key technical chart support level for the dollar at 108.13 yen, a trough the US currency k plumbed in mid-April. The dollar index was up 0.15% to 93.68 as both the euro and sterling weakened against the greenback.

The dollar extended losses against the yen to hit a new two-month low.


CURRENCIES: The euro was down 0.1 percent at $1.175 while the dollar fell 0.6 percent to 109.68 yen.

Japan is the world's biggest creditor nation and there is an assumption Japanese investors may repatriate their foreign holdings in times of heightened global uncertainty.

"The level which we are looking at now is $1,300".

In bond markets, the yield in U.S. Treasuries fell, also pressured by the lowered expectations for a Fed move.

The Swiss franc faired much the same fate for the same reasons and was fairly flat overnight.

Markets had seen a tentative recovery in risk appetite in USA and early Asian trading, but as the war of words resumed Asian stocks dropped back and London, Frankfurt and Paris all lost 0.5 to 1.2 per cent.

The 30-year bond last rose 6/32 in price to yield 2.7847 percent, from 2.794 percent late on Thursday.

"Given the great run we've had, seems like some sort of pullback wouldn't be surprising", said Michael Baele, managing director of investments at U.S. Bank Private Wealth Management.

After touching a more than two-month high, spot gold last added 0.3 percent to $1,290.00 an ounce.

USA crude futures extended losses from Thursday, when they plunged 2 percent on fears of slowing demand and lingering concerns over a global oversupply.

Global benchmark Brent lost 0.3 percent to $51.76, after Thursday's 1.5 percent drop.



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