GLOBAL MARKETS-North Korea risk dents stocks, all eyes on Brexit speech

GLOBAL MARKETS-North Korea risk dents stocks, all eyes on Brexit speech
From Reuters - September 22, 2017

* Reigniting North Korea rhetoric dents risk assets

* European stocks slip as metals sell off

* All eyes on PM May as Florence speech awaited

* Brexit bellwether sterling holds firm

* Graphic: World FX rates in 2017

By Helen Reid

LONDON, Sept 22 (Reuters) - Risk appetite in Europe chilled on Friday after a new exchange of barbs between North Korea and the U.S. sparked a knee-jerk sell-off in politically sensitive metals, while focus turned to a speech by the British Prime Minister on Brexit.

Europes main stock index fell in early trading, following a slide in Asian stocks and a rush to safe-haven currencies overnight after North Korea said it might test a hydrogen bomb in the Pacific Ocean.

Metals prices were battered by heightened geopolitical risk in Asia, making mining stocks the biggest weights in early European trading.

Risk aversion drove investors into the Swiss franc and Japanese yen, with the Swiss currency up 0.2 percent to 0.9688 francs per dollar, while the yen firmed 0.4 percent.

Stealing North Koreas thunder for European investors was a hotly anticipated speech by Prime Minister Theresa May in Florence, in which she was expected to update her vision of Brexit negotiations.

The pound hovered at a two-month high against the euro, having firmed against both euro and dollar this week as traders anticipated she would lean towards a softer tone on negotiations for Britains exit from the bloc.

Sterlings rally in the past couple of weeks is partly in reaction to the Bank of England but also reflects an assumption that its more likely we do get a transitional deal, said Mike Bell, global market strategist at JP Morgan Asset Management.

If thats what May is laying out today that would be supportive, but I think you have seen a lot of that move priced in already, he added.


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