US Stocks were unchanged yesterday as U.S. President Donald Trump heightened his rhetoric against North Korea to an unprecedented level.
In currency news, the dollar was little changed, with the Swiss franc registering the best performance against the greenback as the increased geopolitical tension drove investors towards safe haven assets.
The focus for the US remains the inflation data release tomorrow. Yesterday St. Louis Fed President James Bullard, who advocates keeping interest rates low, said progress toward the inflation target “has been undone” this year. “I’m not too optimistic that we will have higher inflation” on an annual basis by the end of 2017, he said in a Bloomberg Television interview on Wednesday. “We’ve got a ways to go.”
European stocks declined, falling 1.3%, amid escalating tensions between the U.S. and North Korea after the two countries exchanged threats.
The decline in equities was felt across the broad market as all sectors were down at the end of the trading day.
Banking stocks fell 2%, the most in three weeks, as Wednesday marks a full decade after BNP Paribas froze funds that were exposed to U.S. subprime mortgages. Euro- area lenders are still down about 70% since the start of the credit crunch.
In Asia overnight, tensions among US and Korea continued to weigh on stocks. Chinese equities declined 0.5% and Japanese equities were unchanged.