- Title: Germany's DAX opens lower after North Korea's latest nuclear test
- Date: 4th September 2017
- Summary: FRANKFURT, GERMANY (SEPTEMBER 4, 2017) (REUTERS) WIDE OF FRANKFURT STOCK EXCHANGE TRADING FLOOR ELECTRONIC BOARD SHOWING DAX ON PREVIOUS DAY AT 12.142,64 POINTS VARIOUS OF TRADERS ELECTRONIC BOARD SHOWING DAX GRAPH TRADER ELECTRONIC BOARD SHOWING DAX GRAPH TRADERS ELECTRONIC BOARD SHOWING BANKING SHARES (SOUNDBITE) (German) HEAD OF CAPITAL MARKET ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING: "The TV duel (between incumbent German Chancellor Angela Merkel and challenger Martin Schulz) was rather a duet. It was the preparation for another Grand Coalition (between Merkel's conservative CDU and Schulz's Socialdemocrats). The major topics of the future were only broached. So the whole thing was a waste of time. If that had been a job interview - I would not have invited either one of them again." TOY BULLS (SOUNDBITE) (German) HEAD OF CAPITAL MARKET ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING: "The Dax is in a subdued mood. We still have the issue of North Korea. And that is a very serious issue. We know that having tested successfully the hydrogen bomb, they might even go further. And if Russia and China, somewhat allies of North Korea, cannot reign in the country, then who can? And that is also a problem for a U.S. president. And it is clear, one cannot put up with everything. And with his rhetoric being the way it is, we might have to expect pre-emptive strikes. We have to say it the way it is, and it bothers the markets." ELECTRONIC BOARD SHOWING CHANGES IN DAX (SOUNDBITE) (German) HEAD OF CAPITAL MARKET ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING: "The main topic is the ECB meeting. The headline should be: something needs to change on the condition that everything remains the way it is. Mr. Draghi has mastered the art to want to change something because we don't need that massive lavish monetary environment anymore, but he also knows if only goes one centimetre to far, he could destroy the aorta of the financial markets, the business activity, the debt systems of Europe. And that he cannot do either. Therefore, we will continue to have a lavish monetary policy and much positive verbal eroticism for the markets by Mr. Draghi." TRADER ELECTRONIC BOARD SHOWING DAX GRAPH TOP SHOT TRADING FLOOR
- Embargoed: 18th September 2017 09:29
- Keywords: markets DAX North Korea TV debate Merkel Schulz ECB Draghi
- Location: FRANKFURT, GERMANY
- City: FRANKFURT, GERMANY
- Country: Germany
- Topics: Economic Events
- Reuters ID: LVA0016X6IV7X
- Aspect Ratio: 16:9
- Story Text: Stock markets fell and the Japanese yen, gold and sovereign bonds all rose on Monday (September 4) as North Korea's most powerful nuclear test provoked a knee-jerk shift to safe havens.
The DAX slid down 0.8 percent to 12,053 points while the "anti-crisis currency" gold gained more than one percent and was traded at 1,338 Dollar per fine ounce (31.1 gramme).
North Korea on Sunday (August 3) conducted its sixth and most powerful nuclear test, which it said was of an advanced hydrogen bomb for a long-range missile, prompting the threat of a "massive" military response from the United States if it or its allies were threatened. South Korea reacted with conducting a military exercise, the UN Security Council is expected to meet for a special session later in the day.
The much and long anticipated televised election debate between current German Chancellor Angela Merkel and her challenger Martin Schulz on Sunday evening, however, had only little effect on the markets. Snap surveys carried out after the encounter suggest the left-leaning Martin Schulz failed to make any significant inroads: He managed to bounce Merkel into toughening her position against Turkey joining the EU, but did not appear to damage her with attacks on her handling of the migrant crisis of the past two years.
Still, Merkel is not home and dry yet: a poll released before the debate showed Schulz's party narrowing, albeit slightly, Merkel's lead; and there are still plenty of voters out there who have yet to make up their mind. And even assuming Merkel emerges victorious, the current configurations suggest that building a coalition will not be easy.
The big event of the week beyond North Korea is the European Central Bank meeting on Thursday. While the euro has been bid in recent weeks in expectation of some future tapering in the ECB's bond-buying programme, reports last week suggest the euro's strength itself may be one reason the central bank postpones any tightening signal or move and few now expect a major announcement this week.
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