Trump pulls the plug on North Korean talks
|Risk appetite take a hits after Donald Trump cancelled his meeting with Kim Jong-Un next month. This is despite the destruction of a nuclear site earlier in the day.
- Stocks take a turn for the worst, sparking calls for a period of downside
- UK retail sales fuelled bounce fails to last
- Trump cancels meeting with Kim Jong-Un driving risk-off move
European and US markets are on the slide, as markets prepare for another bout of uncertainty given the cancellation of the Trump and Kim Jong-Un meeting in Singapore. The strength we have seen throughout the first half of May is clearly a thing of the past, with equity markets looking likely to turn lower from here on in. This shift out of equities is one part of a wider move out of risk assets, helping push the likes of Gold and the Yen higher this afternoon.
This morning’s surprisingly impressive retail sales figure may have caught markets off-guard, yet while the initial bounce for GBPUSD may have garnered some attention given recent selling, the subsequent afternoon highlights the strength of bearish feeling for the pair of late. While the deterioration in the pound may not encourage those who see it as a reflection of low confidence in the UK economic picture, FTSE investors will at least reap the benefits of a weaker pound during the global market downturn that seems to be gathering pace this week.
Another day, another Trump fuelled bout of market volatility, with the US President calling off the meeting with his North Korean counterpart barely an hourly after journalists reported witnessing the destruction of the Punggye-ri nuclear test tunnels. While Trump’s unpredictability has made the financial markets a much more volatile place, we are certainly seeing arguably the most entertaining presidential term of any US leader in memory. With two unpredictable and egotistical leaders somehow trying to organise a meeting that could apparently decide whether we will see a nuclear war or a big step towards world peace, it is no wonder markets don’t know if they are coming or going.
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