LONDON – Stock markets around the world remained buoyed Tuesday by a seeming further easing in tensions between the United States and North Korea, which has helped investors rediscover their appetite for riskier assets following last week's aversion.
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KEEPING SCORE: In Europe, France's CAC 40 was up 0.5 percent at 5,146 while Germany's DAX also rose 0.2 percent to 12,199. Britain's FTSE 100 was 0.6 percent higher at 7,396. Wall Street was poised for a solid opening too with Dow futures and the broader S&P 500 futures up 0.3 percent.
NORTH KOREA: The main driver in markets over the past couple of weeks has related to North Korea's nuclear program, which prompted U.S. President Donald Trump to threaten Pyongyang with potential military action. That caused a sizeable reverse across global markets last week and an accompanying rally in supposedly safe haven assets such as gold. This week, the mood has been different as more emollient language and an intervention by China has helped ease concerns of an imminent confrontation. On Tuesday, Pyongyang said North Korean leader Kim Jong Un was briefed on his military's plans to launch missiles into waters near the U.S. territory of Guam. But the comments also appeared to signal a path to defuse the deepening crisis with Washington, holding out the possibility that friction could ease if the U.S. made some gesture that Pyongyang considered a move to back away from previous "extremely dangerous reckless actions."
ANALYST TAKE: "The risk rebound continues in financial markets on Tuesday, as tensions between the U.S. and North Korea appear to ease and investors gradually unwind their safe haven trades from last week," said Craig Erlam, senior market analyst at OANDA. "Gold — the ultimate traditional safe haven — is on course for a second day of losses and is currently trading around $1,273, finding some support around the level it ran into difficulty around a couple of weeks ago."
POUND TUMBLES: The British currency suffered another reverse on Tuesday after inflation figures came in lower than anticipated. Consumer price inflation in Britain unexpectedly held steady in July at an annual rate of 2.6 percent, in a development that may ease pressure on the Bank of England to raise interest rates at a time when the economy has slowed amid uncertainty over the country's exit from the European Union. The news saw the pound fall as traders priced in a lower likelihood of any imminent increase in rates. By midday in London, it was down 0.6 percent at $1.2883, while the euro rose 0.3 percent to 0.9114 pound.
ASIA'S DAY: Japan's benchmark Nikkei 225 gained 1.1 percent to finish at 19,753.31. Australia's S&P/ASX 200 added 0.5 percent to 5,757.50. Hong Kong's Hang Seng slipped 0.3 percent to 27,174.96, while the Shanghai Composite index was up 0.4 percent at 3,251.26. South Korea's markets were closed for a national holiday.
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ENERGY: U.S. crude oil lost 21 cent to trade at $47.38 a barrel, while Brent crude, the international standard, slipped 34 cents to $50.39 a barrel in London.
CURRENCIES: The euro was flat at $1.1738 while the dollar rose to 110.39 yen.