Morning Update – 29/08/2017 – by Arjun Lakhanpal

Morning all.. Wall St had a very quiet session with London closed with the S&P closing more or less unchanged  but N. Korea launched another missile last night which apparently flew over Japan! The Nikkei closed down 0.45% and the JPY rallied on a safe haven basis. USDJPY hit a low of 108.33 its lowest level since mid-April and USDCHF touched 0.95, 0.3% lower overnight. Gold rose to 1,322.41 as much as 0.9%, its highest point since November. US treasuries also got a boost from geopolitical tensions with their yields down 3bps. In commodities, Crude oil and gasoline continued to trend higher as hurricane Harvey carries on severely flooding Texas and disrupting its oil refineries, gasoline is at its highest price since July 2015 and Brent crude is now trading at $52.10 a barrel. In response South Korean president Moon has ordered their military to stage a show of force and 4 F-15K jet fighters will conduct a bomb-dropping drill. President Trump and PM Abe have agreed to add pressure on to North Korea and called out to China and Russia to step up to do more. PM Abe has also requested the UN to hold and emergency meeting. In the news, Brexit negotiations started their third round on Monday and they have not got off to a smooth start, Barnier has expressed his concerns over the pace of the talks with Davis. The EU’s chief Brexit negotiator accused the U.K. of not “negotiating seriously” over its withdrawal and called on Theresa May’s government to remove ambiguity about its stance. EURGBP remains in demand and traded as high as .9271. A big week ahaed for US data but a quiet start this morning with just French GDP and consumer spending due. Good luck…