Traders are once again seeking out safe havens following the latest “show of strength” from North Korea. This weekend’s nuclear test has increased demand for precious metals, the Japanese yen and Swiss franc as investors worry about the US-led reaction to the latest provocation from the rogue state. This has also led to a mark-down in stock index futures as equities are expected to come under pressure. The worry is that this latest action could lead to a military response from the US and allies. But even an escalated programme of sanctions (which is the favoured option) could potentially upset the global economy, particularly if it results in a reduction in trade between the US and China. On top of this, today’s trade is likely to be illiquid and prone to sharp price moves as the US is closed for Labor Day.
Financial spread trading comes with a high risk of losing money rapidly due to leverage. You should consider whether you can afford to take the high risk of losing your money.
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