North Korea raises US-China tensions – Danske Bank

Analysts at Danske Bank points out that while markets seem less worried about European politics following the Dutch election and the (so far) strong performance by Emmanuel Macron in France, we are about to face the first test between President Trump and China, as the risk of a US military conflict with North Korea is rising.

Key Quotes

“This week North Korea made its third missile launch test this year and, although it failed, North Korea is determined to develop an intercontinental ballistic missile, which would be able to reach the US. Although it is not there yet, it is getting closer. The North Korea issue is just one of many possible confrontations between the US and China and is likely to be a key issue at the meeting between President Trump and Chinese president Xi Jinping scheduled for 8-9 April.”

“With China’s softer stance of going to the negotiation table with North Korea and President Trump’s increasing impatience, North Korea is another area of conflict bears are following closely. The rising tension between the US and China also means we see a risk of a trade war between the two countries.”