Nuclear news moves markets


Nuclear news moves markets

Tangible signs of progress in the relationship between the US and North Korea were enough to ease market nerves after some worrying but predictable geopolitical news earlier in the week. It was announced that Donald Trump will meet Kim Jong-un on 12 June in Singapore, where the US president will likely try to convince the North Korea leader to scrap his entire nuclear weapons programme. Trump has shown that he is unlikely to settle for a multilateral solution by finally abandoning the deal with Iran, even though there is no real evidence to suggest Tehran has reneged on the terms.

Elsewhere, Malaysia has added fuel to the fire that is currently besieging emerging markets. An election victory for a 92-year old who proposes abolishing the country’s goods and services tax have caused sovereign credit default swaps to spike while forward contracts on the ringgit have fallen sharply. This helps to explain why emerging market equity funds this week experienced their biggest outflows in nearly a year, while fixed income funds have barely done any better.

Read what the team at FE consider to be significant over the current week.