FTSE Makes Gains as North Korean Tensions Ease

Gold Hourly

Gold Hourly

The index had reached a more than 2-1/2-year low of 91.011 on Friday as investors anxious about the short-term impact of Hurricane Irma on the USA economy and were concerned about heightening tensions between North Korea and the United States.

On Friday, William Dudley, the president of the New York Federal Reserve, said havoc wreaked by Hurricanes Harvey and Irma could lift the USA economy (http://www.marketwatch.com/story/feds-dudley-says-hurricanes-harvey-irma-to-give-unfortunate-boost-to-us-economy-2017-09-08) in 2018, owing to the rebuilding that will be needed.

Meanwhile, investors expressed relief after Hurricane Irma was downgraded to a tropical storm, lowering the potential of further damage to the USA, as some commenters estimated the damage from Irma to be about $100 billion. While heavy flooding swamped Miami and other cities, the state's largest city was spared the brunt of the storm. Among major indexes, the Nasdaq Composite suffered the biggest drop, ending the week down 1.2%, while the Dow industrials fell 0.9% and the S&P 500 index dropped 0.6%. "It does appear that the worst-case scenario for Florida has been evaded", said Peter Cardillo, chief market economist at First Standard Financial in NY.

IG says futures indicate the FTSE 100 index to open 26.00 points higher at 7,406.60.

The MSCI All Country World Index, which tracks roughly 2,400 stocks in 47 countries, climbed to its latest peak as Europe's insurers rose more than 2% on hopes Irma's damage would not prove as costly as feared.

The US dollar won a reprieve from risk aversion on Monday after North Korean dictator Kim Jong Un made a decision to hold a party over the weekend rather than launch another missile, tempering safe havens like the yen and Treasuries.

"We are massively stimulating this economy that's already doing pretty well", Paulsen said.

USA stocks booked losses last week (http://www.marketwatch.com/story/wall-street-stocks-set-for-losses-as-life-threatening-irma-aims-for-florida-2017-09-08) ahead of Hurricane Irma, which made landfall in the Florida Keys on Sunday.

All but three of the 12 TSX subgroups were positive to end the day, as health-care sprang 1.6%, information technology was better by 1.1%, and financials were 0.8% to the good.

The dollar added 0.6 percent against its Japanese counterpart to 108.49 yen, moving away from a 10-month low of 107.32 yen touched on Friday.

The dollar index, which tracks the U.S. unit against a basket of six major currencies, was 0.2% higher at 92.51, after skidding to a 2-1/2 year low of 91.011 on Friday.

The WSJ Dollar Index, which measures the US dollar against a basket of other currencies, rose 0.6%, after sinking to its lowest level in more than two years on Friday. Treasury prices and yields move in opposite directions.

Oil prices fell on concerns that Irma's pounding of Florida could dent oil demand in the world's top oil-consuming nation.

Gold prices faded $19.80 to $1,331.40 U.S.an ounce.

Elsewhere on the Comex, silver futures lost 28 cents or about 1.58% to $17.84 a troy ounce.

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