“The market may think that it has history on its side (Chart 3), but the fact that North Korea has demonstrated that it now has the ability to strike the US and that Kim Jong-un appears to be a less rational player than his father and grandfather would suggest that the game may have changed dramatically.”
â€œThereâ€™s nervousness in the market but whether or not weâ€™ll see panic will depend on whether thereâ€™s further escalation. Investors have a case to be worried but whether the worry will turn into something more serious we need to see what develops on the political front.”
No one should be surprised by this. Pyongyang is hell-bent on staying in the spotlight and Trump’s jaunt across the Mideast threatens to shift the focus away from the North/South tensions. So you know, some sabers needed to be rattled. They’re probably also intent on testing the mettle of new South Korean President Moon Jae-in.
“The weekend news – softer industrial production, Capex and retail sales in China, higher oil prices as Saudi Arabia and Russia agree that output cuts should be extended through Q1 2018, a North Korean ballistic missile test â€“ sees us start in mild risk-friendly tone.”