Main topics of the day in the markets of Europe: North Korea’s nuclear tests, the flight into “safety” assets, pre-election debate Merkel and Schulz



Leading stock indexes of Europe on Monday, declining against the background of continuing geopolitical tensions around events on the Korean Peninsula.

On Sunday, North Korea announced the successful test of a hydrogen bomb. Statement of the sixth successful nuclear test of the DPRK was broadcast on the Central television of North Korea.

On the same day South Korea announced the recording of tremors on the Korean Peninsula, which could be caused by a nuclear test in the DPRK. South Korea also reported the detection of signs of preparation, the DPRK for the next launches of ballistic missiles. According to South Korean media reports, the authorities of the Republic of Korea and the USA conduct consultations on the possible deployment in South Korea of aircraft carriers and strategic bombers. Earlier, South Korea held military exercises with the use of ballistic missiles.

The South Korean Kospi stock index on Monday closed with a decline of 1.2%, however, towards the end of a trading session retreated from its intra-day lows.

Tonight will be an emergency meeting of the UN security Council on the question of nuclear tests conducted by North Korea. The Minister of defence of the USA James Mattis warned that any attack by North Korea on the U.S. or its allies will be met with “massive military response”.

Also, today continues the BRICS summit held in China. In the joint Declaration, leaders of Brazil, Russia, India, China and South Africa “strongly condemned” the DPRK conducted a nuclear test and called for resolving the nuclear issue on the Korean Peninsula “by peaceful means only and through direct dialogue of all interested parties.”

By 14:50 GMT the pan-European Stoxx Europe 600 fell by 0.5% in comparison with level of Friday’s close with the decline of the British FTSE-100 index by 0.2%, Germany’s DAX down 0.2 PCT, France’s CAC 40 down 0.3%, Spain’s IBEX is down 0.8 percent.

U.S. financial markets are closed today in connection with the celebration of the country’s labor Day.

Among leaders of decrease in Europe was the technological, industrial companies and representatives of the health sector. Shares of consumer and commodities sectors inhibit the decline in markets, taking advantage of the demand.

In the face of increasing geopolitical tensions, the price of gold in the current moment rose 0.7% to $ 1,340 per ton., approaching earlier to an annual maximum of $ 1343.50. Against the background of rising prices for the precious metal stocks zolotorevich companies Polymetal International, Centamin PLC and Randgold Resources has risen by 2 – 3%.

The Euro paired with the greenback rose to around 1.1913 compared 1.1863 on Friday evening. The US dollar also fell by 0.7% and 0.5%, respectively in pairs with the Swiss franc and the Japanese yen.

Investors expect the scheduled Thursday meeting of the European Central Bank (ECB). According to analysts, the ECB can reduce the amount of QE, in which he takes on government and corporate bonds worth 60 billion euros per month. At the moment the program is valid until December 2017.

Sunday was a televised debate between the main candidates for the post of Chancellor of Germany. According to the TV channel ARD, who conducted the poll of viewers, winning the debate was won by the incumbent German Chancellor Angela Merkel. The Prime Minister and the leader of the block “Christian democratic Union” (CDU) and the “Christian social Union” (CSU) won 55% of respondents ‘ votes. Candidate from the social Democrats, Martin Schulz, is 35%.

In the discussion of migration policy for Merkel voted 44% of viewers, while Schultz was supported by 39%. The position of the Chancellor in foreign policy, was supported by 61% of respondents, Schultz expressed a preference for less than half of the viewers. On the situation in the labour market, the opinions of the audience was divided almost equally: position Merkel supported 45% of the respondents, the position of the Schultz – 40%.

Elections to the lower house of the German Parliament (Bundestag) will take place on 24 September 2017. The position of Chancellor will be given to the candidate from the party that won the elections.

Prepared using materials MarketWatch and CNBC.




Main topics of the day in the markets of Europe: North Korea’s nuclear tests, the flight into “safety” assets, pre-election debate Merkel and Schulz 04.09.2017

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