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

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.