Overnight World Market News
$DIA, $DAX, $DJSH, $N300, $NSEI
Overnight , Asian equities followed US and European equities North on signs that a military conflict between the US and North Korea is not imminent . According to the North Korean news agency, NKorean leader Kim Jong Un is reviewing missile strike plans and said that he will watch what t he US is doing a “ little more”.
Meanwhile, according to a news story, the US Defense Secretary James Mattis (USMC ret) said t he US could “ take out ” any missile from NKorea and added that doing so “ could escalate into War very quickly”.
US President Trump yesterday signed a Presidential memorandum which will set in motion a US trade investigation of China’s intellectual property policies, which could lead to new tariffs on Chinese import s.
China reacted yesterday through state media warning the US to avoid “ making a rash decision”, signalling t hat t he investigation could poison the overall China-US relationship especially at a time when the 2 countries are trying to deal with the NKorea issue.
The risk of an immediate trade war is unlikely as a senior US official signaled that the investigation could take up to a year and would involve consultations with China.
Monday, New York Fed governor William Dudley signaled that another rate hike this year is very much in the cards and suggested that the Fed would announce its tapering plans next month.
He also predicted inflation would move somewhat higher as the labor market tightens further.
The markets are currently pricing in about a 40% chance of a rate hike at the December FOMC meeting. Shayne and have as a base case that the Fed will hike in December, followed by 1 or perhaps 2 rate hikes next year.