Morning all.. Overnight we saw a risk off sentiment following increased tensions in the Korea peninsular giving safe haven assets some strength. Wall St closed slightly lower with the S&P 0.25% after Trump threatened N. Korea with “Fire and fury”. This sent USDJPY and JPY crosses tumbling and pressed on the Nikkei which closed down 1.2%. JPY gained 0.5% against the USD trading to 109.74 (109.70 seen as big support) and CHF gained 0.8% trading to 0.9669, the USD strengthen against most of its other peers. AUD fell 0.4% after Westpac’s consumer confidence fell 1.2% MoM, RBA’s Kent also came out overnight to reiterate the message that the recent AUD strength is a function of USD weakness. In other asset classes yields on government bonds fell following the news on North Korea, 10 year US Treasuries dropped 2bps and JGBs fell 1bp; oil retreated from some of its recent highs. Trump commented on the findings that if North Korea escalates the nuclear threat “they will be met with fire and fury like the world has never seen”. Elsewhere ZAR weakened 1% against the USD after South African president Zuma survived a no-confidence vote in parliament. This means Zuma will hold power until at least the end of the year, there are concerns the motions defeat could backfire on the ANC ahead of the 2019 elections with Zumas approval rating at an all-time low. On the data front we saw China July CPI lower: 1.4% y/y vs 1.5% cons; 0.1% m/m vs 0.2% cons; July food px’s -1.1% y/y, non-food px’s +2.0% y/y-China July PPI in-line: 5.5% y/y-China State Planner: China has achieved its initial results in cutting corporate leverage, corporate debt risks have been contained-RBA’s Assistant Gov Kent: Rise in AUD is really a story of USD depreciation; further rise in AUD would result in slower growth domestically.. This morning we only have French business sentiment data of note but traders watching how European stocks react to Trump comments. Good luck.