Gold rises to eleven month high due to North Korea tensions, U.S. equities rise, whilst European indices sell off

Sep 5 • Morning Roll Call • 1922 Views • Comments Off on Gold rises to eleven month high due to North Korea tensions, U.S. equities rise, whilst European indices sell off

In a relatively quiet day for economic calendar news, the geo political tensions in relation to North Korea, once again dominated the mainstream media’s commentary and as a consequence the investor narrative throughout Monday’s trading sessions. The financial media also focused on the rogue regime’s latest (alleged) hydrogen bomb test, which caused a significant earthquake in parts of N.K., with tremors felt in neighbouring China.

Despite the gravity of the situation, only Asian markets were sold off sharply on Monday, perhaps the regular occurrence of these incidents is now met with an indifferent attitude by investors, as the shock value has begun to evaporate. The South Korean Kopsi gauge fell by 1.1%, Japan’s Nikkei 225 and Topix indices, and the Hang Seng in Hong Kong, all closed down at similar levels, of circa 1%.

However the DJIA closed up 0.18%, and the SPX up 0.20%. Gold increased by circa 0.70% on the day to $1333 per ounce, whilst at one point breaching R2 and reaching an intraday high of $1339, the highest level witnessed for close on eleven months. EUR/USD rose by approx 0.2% to 1.8915, GBP/USD fell by circa 0.2% to 1.2926, whilst yen, similar to the reason gold rose sharply on the day, attracted interest as a safe haven asset; USD/JPY falling by approx. 0.3% to 109.62. A similar pattern was witnessed with yen versus the majority of its peers, although the early Monday morning sell off did recede throughout the day, as calm appeared to be restored.

European economic calendar data centred on the UK’s construction PMI published by Markit, which missed expectations by falling, the Sentix Eurozone investor confidence reading came in ahead of forecast, whilst the Eurozone producer price index fell to a figure of 2% growth annually. European indices sold off in unison on Monday; STOXX 50 closing down 0.39%, DAX down 0.33%, CAC down 0.38% and the UK’s FTSE 100 down 0.36%.

Significant economic calendar events for September 5th, all times quoted are London (GMT) time

05:45, currency impacted CHF. Gross Domestic Product (YoY) (2Q). The prediction is for a modest fall to 1.0%, from the 1.1% growth recorded in Q1.

07:15, currency impacted CHF. Consumer Price Index (YoY) (AUG). The forecast is for a rise to 0.5%, from the 0.3% figure registered in July.

07:55, currency impacted EUR. Markit/BME Germany Composite PMI (AUG F). The expectation is for no change, from the 55.7 value published in July.

08:30, currency impacted GBP. Markit/CIPS UK Services PMI (AUG). Analysts are anticipating a moderate fall to 53.5, from the 53.8 reading recorded in July.

08:30, currency impacted GBP. Markit/CIPS UK Composite PMI (AUG). The prediction is for a fall to 54, from the 54.1 value revealed in July.

09:00, currency impacted EUR. Euro-Zone Retail Sales (YoY) (JUL). The expectation is for a reading of 2.5%, a fall from the 3.1% reading registered in June.

09:10, currency impacted AUD RBA Governor Lowe’s Remarks at Board Dinner. Coming shortly after the interest rate announcement earlier in the day, this speech will be monitored carefully for a decision explanation and any forward guidance clues.

14:00, currency impacted USD Factory Orders (JUL). The forecast is for a sharp drop to a -3.3% negative reading, from the 3.0% published in June.

14:00, USD Durable Goods Orders (JUL F). The prediction is for a recovery to positive growth of 1%, after the shock -6.8% value registered in June.


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