Stock markets in the US retreated to start the trading week with the Dow falling 0.3% and the NASDAQ falling 1.0%.Technology stocks, which had led the way higher back in the spring and summer, led the way back down. Apple dropped 0.75% on reports that the company has asked suppliers to hold iPhone X component shipments to 40% of the original projection, as weak iPhone 8 sales cut into iPhone X expectations. Netflix lows 4.5% meanwhile, on reports more content providers could pull the plug and set up their own competitive streaming services. 

Across the pond, German election results had a big impact on trading. Chancellor Merkel’s party won but posted its worst result in about 70 years while the Socialist party did so poorly it pulled out of the Grand Coalition leaving Merkel scrambling to find new partners. The right wing Alternative For Germany party exceeded expectations on an anti-immigration platform scoring about 12: of the vote. Increased political uncertainty in Germany which had been the rock of the Eurozone in recent years, sent the Euro lower and helped the Dax to post a small gain on the day. On the other hand, Spain’s IBEX dropped 0.9% as this weekend’s Catalonia Independence Referendum approaches. 

Capital leaving stock markets has started to head toward defensive havens again with JPY rallying and gold regaining $1,300. North Korea announced it considers recent comments from US President Trump as a declaration of war and indicated it could shoot down US planes outside its borders. 

Crude oil has broken out today with Brent gaining 3.5% and WTI climbing 2.9%. There hasn't been any news although President Trump sabre rattling against Iran and Venezuela could be having a bigger impact as traders move past hurricane disruptions. 

The rebound in oil hasn’t helped commodity currencies with CAD, AUD and NZD trading lower but this could change. NZD plunged following the weekend’s election that saw National win but fall a few seats short of a majority government. NZD could remain active around today’s New Zealand trade numbers and traders preparing for this week’s RBNZ meeting. 

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