Originally published by Rivkin Securities
Risk-off appetite continued overnight with gold rising 1.1% and the Dow Jones Industrial Average falling 0.9%. The Nasdaq 100 was one of the worst performers, closing down 2.2%. The most immediate cause for the sell-off appears to be the tensions surrounding North Korea with no let-up in the aggressive rhetoric between North Korea and the US. Other global stock markets fell with the DAX down 1.15% and the FTSE 100 down 1.4% while bond prices rose as investors rushed for safe haven assets. The relatively large stock market moves sent the CBOE Volatility Index higher after a run of small market moves had the index at a historically low level. Volatility tends to rise as markets are falling.
Gold closed at a two-month high as the precious metal pushes back towards US$1,300 per ounce. The Australian dollar fell further last night and is now back below US$0.79 as the Aussie is considered a ‘risk-on’ currency.
S&P/ASX 200 futures are currently down 1.2% although the index is currently towards the top of its recent narrow trading range so any falls today will simply bring the index back to around its three- month average level. National Australia Bank (AX:NAB) (NAB) is set to release its quarterly trading update today although nothing spectacular is expected.
Data Releases:
- US CPI 10:30pm AEST