North Korea rattles the East & Europe slows | Calamatta Cuschieri

Global markets pulled back on Tuesday as haven assets, including bonds and gold, were back in favour. A risk-off mood settled over markets after a long-range ballistic missile test by North Korea restricted investors’ risk appetite

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Calamatta Cuschieri
5 July 2017, 12:09pm
North Korea's missile landed in Japanese waters amid claims from Pyongyang that the North has reached a milestone in its weapons programme
North Korea's missile landed in Japanese waters amid claims from Pyongyang that the North has reached a milestone in its weapons programme
Global markets pulled back on Tuesday as haven assets, including bonds and gold, were back in favour. A risk-off mood settled over markets after a long-range ballistic missile test by North Korea restricted investors’ risk appetite and the 4th of July marked a holiday in the USA as the world’s largest economy closed its markets for its Independence Day celebrations.

Asian shares were pushed lower and South Korea's Won slid to a 16-week low after North Korea's missile landed in Japanese waters amid claims from Pyongyang that the North has reached a milestone in its weapons program and could now strike "anywhere in the world".

European markets dropped as the first fall in oil prices in nine days pushed down commodity stocks. Traders also cashed in some of the gains made by the STOXX 600 on Monday which had been the biggest in over two months. Brent oil prices ended up recovering slightly, stabilizing and closing near $50 a barrel on tentative signs that U.S. crude production may be slowing.

State aid for the world’s oldest bank

Italy’s plan to support the bank was approved “on the basis of an effective restructuring plan”
Italy’s plan to support the bank was approved “on the basis of an effective restructuring plan”
Italy’s plan to support the bank was approved “on the basis of an effective restructuring plan,”

Banca Monte dei Paschi di Siena won formal European Union approval to receive a €5.4 billion-capital injection from the Italian government in return for further restructuring of the world’s oldest bank. Monte Paschi was forced to turn to Italy for aid after it failed to raise funding from investors in December.

“We are still waiting for the details of the plan, but guidelines seem in line with the expectation and mark the final stage for Monte Paschi’s revamp,” said Fabrizio Spagna, managing director at Axia Financial Research in Padua, Italy. The recapitalization “should ensure a turnaround for the lender and should help the whole Italian banking industry.”

Italy’s plan to support the bank was approved “on the basis of an effective restructuring plan,” the Commission said in a statement. “This will help ensure the bank’s long-term viability, whilst limiting competition distortions.” In return for the state aid, Monte Paschi agrees to a five-year plan calling for measures to re-orient its business model toward consumers and small business, strengthen efficiency and improve management of credit risk.

Online glitch wakes investors

Incorrect stock data on the popular Google Finance, Yahoo Finance and Bloomberg sites appeared to be freaking out some investors, after test data was apparently misinterpreted by third-party providers to those sites.

Shares in Apple and Amazon appeared to have skewed down to €123.47 showing huge losses whilst shares in Mattel Inc. and Microsoft Corp. skyrocketed up to that same figure, being the common denominator for the test data.

A Nasdaq spokesman speculated that the day’s early close might have caused additional confusion with some closing prices for a number of third parties, including Bloomberg and Yahoo, but emphasized that no trades were affected by the erroneous quotes.

Disclaimer:

This article was issued by Peter Petrov, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

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