Traders shake off global risk — North Korea — and push stocks higher
Putin warns that threatening military action could trigger "a global catastrophe", but investors move out of bonds, gold and other safe-haven assets
London — On Tuesday, Europe’s financial markets appeared to have already shaken off the jitters prompted by North Korea’s latest nuclear test, with stocks pushing higher and investors reversing out of bonds, gold and other safe-haven assets. As with many political risks over the past couple of years, traders showed again that there is now a reluctance to price in the tail risks on every possible bad outcome and are instead focusing on the more prosaic but upbeat global economic picture. Confirmation that eurozone business activity remained robust last month helped the pan-European STOXX 600 claw back most of the 0.5% it lost on Monday amid international condemnation of North Korea’s nuclear test. The euro also tip-toed higher as risk appetite tentatively returned and the data, which also showed rising inflation pressures, put the focus back on Thursday’s European Central Bank meeting. European government bond yields also crept up and gold — the traditional go-to for traders when geo...
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