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Asian stocks rise after North Korea refrains from launch

Asian stocks rise after North Korea refrains from launch

Most Asian stocks rose on Monday amid improved risk appetite as fears about hurricane Irma have waned and North Korea refrained from launching more missiles at the weekend despite speculation that it would do so.

Market participants had been anxious about a potential North Korean missile test on Saturday, to mark the anniversary of the founding of the nation.

The risk on sentiment will likely see the Euro remain on the back foot through the remainder of the day, which could see the Euro give up $1.20 levels early in the session, with the only consideration for the day being any possible friction between the North Korean's and the U.S, though a war of words is more palatable than actual missile or nuclear tests, as far as the markets are concerned. "This prompted a predictably fiery rhetorical response from the North Koreans but little else as we get set for what looks set to be a positive start to the week", says Michael Hewson, chief market analyst at CMC Markets. The country proclaimed itself to be an "unbeatable atomic power" amid the festivities. But Pyongyang did not carry out another test of an intercontinental ballistic missile, as South Korea's government had warned it might do. The blue-chip index closed down 0.3%, or 19.38 points, at 7,377.60 on Friday.

Speculators raised their net long position in COMEX gold for the eighth straight week to the highest in almost a year in the week to September 5. Traditional haven assets, such as gold and the Japanese yen pulled back on Monday, while equities saw marked gains, led by a 1.4% gain for the Nikkei 225 index. In China, the Shanghai Composite is up 0.2%, while the Hang Seng index in Hong Kong is 1.0% higher.

While it's a quiet start to the week on the economic calendar, there are certainly some key stats due out this week from both sides of the Pond, with United Kingdom and U.S retail sales and inflation figures due out later in the week.

Consumer price inflation accelerated to 1.8% in August from 1.4% in July. The Dollar is not out of the woods yet, with the upside coming more from a lack of action from North Korea than a shift in sentiment towards FED monetary policy, though that could all change this week should U.S inflation and retail sales figures impress.

Ranked as one of the most powerful hurricanes ever recorded in the Atlantic, Irma hit a wide swath of Florida on Sunday before being downgraded to a tropical storm.

The National Hurricane Centre on Monday said the storm "should continue to lose strength and fall below hurricane intensity" during the day, as it continues its path northwards.

Power was cut to more than one million people in Floria and cranes buckled in Miami as the Category 4 hurricane made land in the U.S. but financial markets had been bracing for an economy denting storm that could delay further interest rate hikes in the US.

In a slim economic calendar, Italian industrial output is due at 0900 BST.


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