European equity markets are higher this morning as the political landscape regarding North Korea improves.
The upward move in stocks has been attributed to the easing of political tensions between the US and North Korea. With the US going down the political route rather than the military option, traders feel more confident about buying into equities.
Washington DC is exerting pressure on Pyongyang via Beijing, as China is halting imports of minerals from North Korea. Investors are using this political shift as an opportunity to pick up stocks that sold-off heavily last week. As the tensions are unwinding, we are seeing more buyers step back into the fold.
The GBP/USD was pushed lower by the latest UK CPI data. On a year-on-year basis, UK inflation held steady at 2.6%, but economists were expecting it to tick up to 2.7%. The core CPI on an annualised basis remained unchanged at 2.4%, and traders were anticipating a reading of 2.5%.
The EUR/USD is weaker this morning as Germany’s economy continues to grow, but the second-quarter growth rate was below expectations, and this put pressure on the single currency. It does not bode well for the euro if the largest economy in the region is expanding at a slower than expected rate.
We are anticipating the Dow Jones to open 37 points higher at 22,030, and we are calling the S&P 500 up 4 at 2469.
At 1.30pm, the US will announce retail sales for July, and traders are expecting a reading of 0.4%.
Home Depot will report their second-quarter figures later today.
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