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The U.S. dollar was off to a rough start as traders were rattled by news of North Korea’s missile launch, but markets soon calmed down and recovered.

The Swiss franc was the main beneficiary of these risk-off flows as the yen dipped because the missile landed just off Japan’s northern coast.

  • Canadian raw material price index down by 0.6% vs. projected 0.2% dip
  • Canada’s industrial product price index down by 1.5% vs. estimated 0.7% drop
  • U.S. CB consumer confidence index rose from 120.0 to 122.9 in August
  • U.S. S&P/CS Composite-20 HPI up by 5.7% vs. projected 5.6% gain

Major Events/Reports

North Korea jitters eased

Traders weren’t hungry for riskier assets during the earlier trading sessions as North Korea’s latest missile launch hogged the headlines. However, U.S. equities and the dollar were able to claw back their gains during the latter half of the New York trading session when fears of an all-out nuclear strike subsided.

U.S. President Trump did warn that all options are on the table and that North Korea’s actions pose a grave threat to the international community. A statement issued by the White House said:

The world has received North Korea’s latest message loud and clear. Threatening and destabilizing actions only increase the North Korean regime’s isolation in the region and among all nations of the world. All options are on the table.”

The Donald did have a conference call with Japanese PM Abe to ensure cooperation among their nations, then later on visited Texas to boost morale among those hit by Tropical Storm Harvey.

U.S. markets then moved on to other updates, such as the stronger than expected CB consumer confidence index which rose from 120.0 to 122.9 in August, outpacing the consensus at 120.9. This pickup in optimism was a more upbeat assessment of present-day economic conditions.

Equity indices pulled up from their intraday lows to catch some gains:

  • The Dow 30 index is up 0.20% to 21,852.62
  • The S&P 500 index is up 0.12% to 2,447.18
  • The Nasdaq is up 0.36% to 6,305.27

Commodities slightly lower

Commodities ended mostly in the red for the trading session, with gold giving back some of its intraday safe-haven gains and crude oil still being dragged lower by Harvey.

  • Gold is down 0.01% to $1,315.20 per troy ounce
  • Silver is down 0.26% to $17.395 per troy ounce
  • WTI crude oil slid 0.19% lower to $46.48 per barrel
  • Brent crude oil is up 0.15% to $51.52 per barrel

Exxon’s Beaumont facility, which is the largest oil refinery in the country, is currently shut down due to the tropical storm. Royal Dutch Shell’s Deer Park refinery is also closed down temporarily. This means that at least 3 million barrels per day are sitting idly in stockpiles, waiting to be processed.

Major Market Mover(s):

CHF

The frank continued to benefit from the prevailing risk-off vibes even as its other safe-haven rivals returned their recent gains.

AUD/CHF is down from .7609 to .7591 (-0.21%), GBP/CHF tumbled from a high of 1.2358 to 1.2327 (-0.20%), USD/CHF is down to .9538 (-0.14%), and NZD/CHF slid to .6920 (-0.13%)

CAD

The oil-related Loonie was mostly lower against its peers due to the standstill in the U.S. oil industry and weaker risk appetite.

CAD/CHF is down from .7638 to .7609 (-0.35%), EUR/CAD broke past the 1.5000 barrier to a high of 1.5074 (+0.31%), NZD/CAD is up to .9094 (+0.23%), and USD/CAD recovered to 1.2531 (+0.19%)

Watch Out For:

  • 11:45 pm GMT: New Zealand building consents m/m (-1.0% previous)
  • 12:01 am GMT: U.K. BRC shop price index y/y (-0.4% previous)
  • 12:50 am GMT: Japanese retail sales y/y (1.1% expected, 2.2% previous)
  • 2:30 am GMT: Australian building approvals m/m (-5.1% expected, +10.9% previous)
  • 2:30 am GMT: Australian construction work done q/q (+1.0% expected, -0.7% previous)
  • 2:30 am GMT: RBNZ Governor Wheeler’s testimony