Market Brief: another day, another threat from Trump
09 Aug 2017
There was a little more action yesterday evening in financial markets with President Trump warning that North Korea will face a devastating military strike if it continues to threaten the US.
Latest rates | Today's data release | ||||||
---|---|---|---|---|---|---|---|
GBP/USD | GBP/EUR | GBP/AUD | GBP/AUD | GBP/CHF | 12:00 | US MBA mortgage approvals | |
1.3023 | 1.1082 | 1.6509 | 1.6514 | 1.2617 | 13:30 | US non-farm payrolls productivity | |
GBP/JPY | GBP/HKD | GBP/ZAR | EUR/USD | EUR/GBP | 13:30 | US unit labour costs | |
143.21 | 10.1780 | 17.4509 | 1.1755 | 0.9026 | 15:00 | US wholesale inventories | |
Investec currency forecasts as at 27 July 2017 | Key levels | ||||||
Q3 '17 | Q4 '17 | Q1 '18 | Q2 '18 | Support | Resistance | ||
GBP/USD |
1.29 | 1.30 | 1.30 | 1.31 | 1.2920 | 1.3260 | |
GBP/EUR | 1.13 | 1.14 | 1.13 | 1.13 | 1.1094 | 1.1200 |
Market overview
There was a little more action yesterday evening in financial markets with President Trump warning that North Korea will face a devastating military strike if it continues to threaten the US. As per Bloomberg, he said the country would be "met with fire and fury and, frankly, power the likes of which the world has never seen before" if it continues to threaten the US. The VIX (a measure of expected S&P 500 stock index volatility) spiked from 9.54 just after Europe went home to around 10 when the comments were reported to a peak of 11.29 with 30mins left in the session before closing at 10.96. Currencies were little changed, the US dollar index gained 0.2%, while EURUSD fell 0.4% and the GBPUSD dipped 0.3%.
Staying with Trump, an earlier article by the Washington post suggested North Korea’s nuclear capabilities may be more advanced than prior expectations. According to US intelligence reports the state: i) can now produce small nuclear warheads that fit inside its missiles, ii) is outpacing expectations in building missiles that are capable of striking the US mainland, and that iii) the state may have up to 60 nuclear warheads, this compares to ~7,000 each in US / Russia, 260 in China and 215 in the UK.
A motion of no-confidence in South Africa’s President Zuma was defeated by 198 votes to 177. Even though the ballot was held in secret, the opposition was not able to persuade enough members of Zuma's ruling African National Congress to side with them.
Looking at the day ahead, it is another quiet day in markets. We have the US preliminary Q2 non-farm productivity, unit labour cost data and final June wholesale inventories as well as the MBA mortgage applications.
Staying with Trump, an earlier article by the Washington post suggested North Korea’s nuclear capabilities may be more advanced than prior expectations. According to US intelligence reports the state: i) can now produce small nuclear warheads that fit inside its missiles, ii) is outpacing expectations in building missiles that are capable of striking the US mainland, and that iii) the state may have up to 60 nuclear warheads, this compares to ~7,000 each in US / Russia, 260 in China and 215 in the UK.
A motion of no-confidence in South Africa’s President Zuma was defeated by 198 votes to 177. Even though the ballot was held in secret, the opposition was not able to persuade enough members of Zuma's ruling African National Congress to side with them.