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Traders nervy due to North Korea and May Day

Stocks in Europe are mixed this morning as the North Korean situation has taken a new turn.

Pyongyang has threatened to test a hydrogen bomb in the Pacific. This comes after Donald Trump’s speech at the United Nations, and calls for tougher sanctions against the state.

Traders are certainly keeping an eye on the developments in the region, but while there is no military action, there will be some investors who will hold their nerves through the tense stand-off.

Johnson Matthey had a stellar performance yesterday, and the positive run continues after a broker upgrade rom Credit Suisse. The investment bank raised its price target for the company to 3700p from 3500p.

A drop in copper and iron ore prices has prompted a sell-off in mining stocks like Antofagasta, BHP Billiton, Anglo American and Glencore. The basic resources companies are some of the biggest fallers on the FTSE 100.

The EUR/USD has rallied this morning after France and Germany posted impressive manufacturing and services data. The reports from both countries exceeded economists’ estimates, and showed an increase in growth on the month. The single currency has clawed back a lot of the losses it incurred against the greenback in the wake of the Federal Reserve being more hawkish than expected.

The GBP/USD will be in focus today as Theresa May is expected to deliver a speech in Florence, outlining her plans to push the Brexit negations forward. There ae many areas that will be touched upon, but ultimately traders will be looking at how ‘soft’ or ‘hard’ the trade aspect will be.

We are expecting the Dow Jones to open 15 points lower at 22,344, and we are calling the S&P 500 down 1 point at 2499.

At 2.45pm, the US will release the manufacturing and services reports for September, and traders are expecting a reading of 53 and 55.8 respectively.

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