Global equities remain under pressure on Wednesday despite positive developments in the Korean peninsula, which suggests that market participants are more focus on the formalisation of Trump new trade tariffs. The Nikkei ended the session down 0.77%, Hong Kong Hang Seng was off 1.03%, while Singapore’s STI fell 2.03%.
South Korea and North Korea are planning a meeting at the end of April. The news came on the back of the announcement that Kim Jong Un, the North Korean leader, was willing to give up on its nuclear programme, should the safety of the regime will be guarantee. Maybe the inconsistency and unpredictability of Kim Jong Un is keeping investors on their toes.
In the US, the resignation of Gary Cohn as director of National Economic Council suggests that Trump is actually moving forward with its trade war. Therefore, the market remains broadly in risk-off mode as the Japanese yen and the Swiss franc extended gains against the greenback. The former was up 0.50%, while the latter rose 0.35%. For now, it is hard to know where to stand, as there is a lot of moving pieces on the political side. On the other side of the Atlantic, the single currency kept grinding higher against the US dollar, with the most traded currency pair hitting 1.2434 during the European morning. We remain positive on the currency pair with the 1.2550 as next target.
By Arnaud Masset