Three things to know before US opening

1. Missile launch
Geopolitical tensions were rekindled after North Korea launched a missile that flew over Japan before crashing into the sea. The market reaction to the test was a sharp rush into haven assets, which saw the yen and gold rallying, while the yield on 10-year U.S. Treasuries dropped below 2.1 percent for the first time since November. Following the initial reaction in Asia markets, investors are now looking to any official response from the U.S., China or Japan before making their next move. President Donald Trump had not tweeted about the incident as of 5:30 a.m. Eastern Time.

2.Another hit from Harvey
The latest status on the weather event that caused so much destruction in Texas over the weekend shows that Harvey has moved back over the Gulf of Mexico and is likely to make landfall again tomorrow on the Texas-Louisiana border. With estimates for damage wrought by the storm rising to as high as $100 billion, President Trump has promised swift funding to meet the needs of the region ahead of a planned visit to the area today. In markets, the biggest effect is still being felt in gasoline futures, which gained another 1.7 percent this morning. A barrel of West Texas Intermediate for October delivery is trading at around $46.64.

3. Brexit talks stalled
European Commission President Jean-Claude Juncker said at a press conference this morning that none of the U.K. position papers published ahead of the latest round of talks on Britain’s exit from the EU are satisfactory. Those comments will likely add to an already-tense atmosphere at the talks, with the EU’s chief negotiator, Michel Barnier, yesterday airing his frustration over the ambiguity of Britain’s position. The pound dropped to 1.0759 per euro in trading this morning.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

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