N.Korea’s Rockets Are Losing Their Effect But Carney’s Words Are Not

North Korea sent another rocket over Japan this morning sending UsdJpy down 70 points but soon recovered as the market is losing it’s sensitivity to N.Korea’s antics.

The big move overnight was in the Cable as the BoE’s statement came out a lot more hawkish than the market had expected. This paves the way for a BoE rate hike in the near future. The first in 10 years.

Us CPI had a narrow beat at 0.4% m/m, but this was overshadowed by the BoE’s change of tone. The chances of a Dec Fed rate hike now sit at 50/50, twice that of a week ago. This may reinvigorate Dollar bulls, but in the last session the wind has come out of their sails against the Euro with talk from ECB members around tapering QE.

Looking forward to end the week, the data calendar is looking fairly quiet with only US retail sales worth looking at later in the NY session, however markets remain on edge after some big moves in the majors. There is an interesting pattern forming in the Sterling after last nights rally. At the time of writing, it looks suspiciously like there is a big player selling around the 1.3400 level, keeping a lid on last nights move. Once whoever this is runs out of patience or funds we could see more upside. The international response from the latest rocket launch will be one to watch. As per usual the Yen, Chf and gold will benefit from any further fall out.

Just a thought to share over your Friday night shandy’s. I wonder if Kim Jong Un’s Yen and gold reserves spike just before a missile launch. The gains would certainly help the coffers that must be bleeding from international sanctions…

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