In the event, it appears the Australian market underestimated the extent of US stock market selling in response to the Korean situation. While US investor nervousness was compounded by concerns over the impact of Hurricane Irma, last night’s 0.75% fall in the S&P 500 is set to deliver a weak opening for the local market. This could see the ASX 200 testing chart support in the 5645/5665 range yet again.

Safe haven assets like gold, bonds and the Yen remained bid last night indicating that sentiment over the Korean situation remains brittle.

 However, this is a situation that’s proven consistently fruitful for short term bargain hunters in recent months. If selling momentum shows signs of faltering around established ASX 200 support levels , bargain hunters may be quick to step in.

Statements by dovish Fed governors last night, together with the potentially disruptive economic impacts of the US hurricanes, reinforce the fact that a December rate hike by the Fed looks like being contingent on hard evidence of improving wages and inflation over coming months.

Australia’s second quarter GDP growth looks like delivering a solid dose of mean reversion after a weak first quarter. This provides the stock market with a supportive back drop of ongoing economic growth and low interest rates