Global Weekly: Tug of Words

News item -

The heightened rhetoric between the US and North Korea has led to only a moderate market reaction and some mild risk aversion. Nothing much worse is expected.

The escalation in words between North Korea and the US is not viewed as a significant market threat, and no major correction is expected. The attraction toward safe haven assets such as the Japanese yen, the Swiss franc and gold, has been limited. Equity markets are displaying short-term volatility, but are trading not far from recent highs. The reaction in bond markets was also muted, given that nominal bond yields were trading at low levels.

The global synchronized recovery continues in all regional blocks. It is being supported by a well-established recovery in world trade, after some volatility was seen earlier in the summer.

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