Selloff in stocks takes a breather; gold and yen tick up

Selloff in stocks takes a breather; gold and yen tick up

Equities slid, while US Treasuries and gold climbed, as US President Donald Trump's latest comments further inflamed tension with North Korea.

The yen firmed slightly against the dollar early on Wednesday after North Korea said it is considering plans for a missile strike on the U.S. Pacific territory of Guam.

On Monday, Liberty Korea Party leader Hong Joon-pyo called for the deployment of American tactical nuclear weapons, saying, "Peace will come when we achieve a balance of power, not when we are begging for it".

Market analysts expect that the pullback in stocks due to the increasingly aggressive tone in exchanges between Washington and Pyongyang will continue, although investors hope that the selling will not escalate to a correction - a decline of 10 percent or more.

US stock-index futures pointed to more losses for Wall Street on Thursday as tensions between the USA and North Korea showed few signs of easing. The Nasdaq composite fell 35 points, or 0.5 percent, to 6,336. In economic news productivity, or how many goods and services USA workers produce an hour, rose at an annual rate of 0.9% in the second quarter from the previous three months, the Labor Department said Wednesday. Gold, meanwhile, a traditional safe haven for investors, gained $26.50 since Monday, closing Thursday at $1291.20 per ounce.

Trump, whose threat this week to bring "fire and fury" was dismissed by North Korea, said Thursday that statement might not have been "tough enough".

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Many world stock markets have hit record or multiyear highs in recent weeks, leaving them vulnerable to a sell-off, and the tensions over North Korea proved to be the trigger. Against the euro, the dollar is valued at USD1.826 compared to yesterday's USD1.1772.

Against the dollar, the franc surged 0.6 percent to 0.9688 francs, reversing a two-week losing streak.

"We're not very oversold yet so the market still has more downside left to it", said Robert Pavlik, chief market strategist at Boston Private Wealth in NY. The 30-year bond was last up 4/32 in price to yield 2.7871 per cent, from 2.794 per cent late on Thursday.

As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.5 basis points at 2.226%.

Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in USA crude inventories, leaving prices volatile.

Crude oil prices fell on Thursday, on concerns of lingering global oversupply as Russian Federation considered a future output resumption and OPEC boosted its July production numbers.

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