US-North Korea tensions weigh on markets

Heightened tensions between the US and North Korea affected markets yesterday. Equities were weaker, with European stocks falling by more than 1% while US stocks also ended lower although they did manage a late rally into the New York close

There was also a mini flight to the safety of core government bond markets, resulting in a fall in 10-year yields of between 2 and 5bps (to 0.43% and 2.24% in the case of German and US yields respectively)

On the currency markets, the Swiss franc and Japanese yen were (as usual) the main beneficiaries in the more risk averse environment prevailing, although their gains were modest enough. Meanwhile, the euro was again a little softer against the dollar, briefly dipping below $1.17. It continues to trade above 90p against sterling

The latest RICS housing survey in the UK reports a ‘continued lack of momentum’ in sales and new buyer enquiries in July and a softening in price expectations

Data due today include industrial production and construction output in the UK as well as jobless claims in the US