The meeting between President Donald Trump and Kim Jong Un was met with a collective shrug by global markets, which are more fixated on a host of macro events and data coming in the next few days. Stocks climbed, Treasuries nudged down, and commodities were range-bound.
The Stoxx Europe 600 Index rose for a second day, following modest gains for many Asian gauges which failed to ignite the MSCI Asia Pacific Index. S&P 500 futures edged up after the underlying gauge posted a similar small advance on Monday. Safe-haven assets including the yen and gold slipped as Trump and Kim signed a document pledging to work toward peace on the Korean peninsula. The pound extended a decline as Theresa May’s landmark Brexit legislation goes to Parliament.
There was never much prospect of the U.S.-North Korea summit triggering a large market reaction, except perhaps in the event of a shock outcome. A seemingly certain Federal Reserve rate increase on Wednesday, plus the prospect of a hawkish European Central Bank tilt on Thursday, tease far more concrete developments for traders. Tuesday’s inflation figures out of the U.S. may even reignite the four-hikes-in-2018 debate ahead of the Fed’s decision.
“Despite the historic event, the markets haven’t moved much because they’ve already discounted the risk of military conflict,” Goohoon Kwon, co-head of Korea research and senior Asia economist at Goldman Sachs Group Inc. told Bloomberg. What’s more important going forward is the “follow-through, execution, implementation” of any agreements, he said.
- The Stoxx Europe 600 Index climbed 0.3% as of 8:01 a.m. London time, the highest in more than two weeks.
- Futures on the S&P 500 Index rose 0.1%, reaching the highest in three months on its eighth consecutive advance.
- The U.K.’s FTSE 100 Index climbed 0.3% to the highest in almost three weeks.
- Germany’s DAX Index rose 0.6% to the highest in more than two weeks on the biggest advance in more than a week.
- The MSCI Emerging Market Index increased less than 0.05%.
- The MSCI Asia Pacific Index gained 0.1%.