The main focus of traders shifted quickly from the Texas hurricane disaster back to rising political tensions in Asia.

Overnight trading has been dominated by news that North Korea staged another missile test that passed over Japan. Japan has called for a UN Security Council meeting amid signs that sanctions aren't working. 

Defensive havens like Gold and the Japanese Yen jumped on the news. Gold added another 1.0%. Stocks, on the other hand, have been slammed downward. The Dax is down 1.7% this morning with the FTSE down 1.0%.  

With limited corporate news out there, politics may continue to overshadow trading. NAFTA and Brexit negotiations continue. Comments around talks could impact CAD, MXN, GBP and EUR. Canadian banks could be active with Bank of Montreal and Bank of Nova Scotia both beating the street. 

Hurricane Harvey may continue to impact US trading where Dow futures are down 0.5% and NASDAQ futures are down 0.8%.  It remains to be seen if US politicians can rally together on disaster relief efforts or if the Hurricane will add to the stress of budget and debt relief negotiations.  The US Dollar remains under pressure this morning falling against other majors, including the Euro and Sterling. 

Although Harvey has been downgraded to a tropical storm, it continues to dump huge amounts of rain on the Gulf Coast. It remains uncertain how much damage has been done to production facilities and refineries or how long it could take to get them back on line. Later today, API kicks off what could be a series of distorted inventory reports.

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