NK Goes Ballistic, Gold is Down, Reason Surrenders

Gold

Gold is down $4.00 at time of this writing despite the world's unceasing march towards madness.

Gold last: $1219, just above out serious danger zone of $1217-$1214

Price updates HERE

Today in the EU and Americas

North Korea has a new saber to rattle
Fed minutes may hint at timing for balance sheet reduction
No end in sight to Qatar crisis.

North Korea

Yesterday's rocket test by Kim Jong Un's regime has been confirmed as North Korea's first intercontinental ballistic missile, raising the possibility that the country could develop the capability to launch a direct nuclear attack on the U.S. The United Nations Security Council will hold an emergency meeting later today, with Secretary of State Rex Tillerson calling North Korea’s actions a "new escalation of the threat" to the U.S. and its allies. While financial markets in Seoul showed little signs of panic, there were increased indications that investors are seeking to protect themselves from further declines in the won.

Fed Minutes

At 2 p.m. Eastern Time the minutes of the Federal Reserve's June 13-14 monetary policy meeting will be published. Investors will be looking for clues as to the timing of the start of the reduction in the bank's $4.5 trillion balance sheet. Any mention of financial stability concerns, which may force the Fed's hand to continue tightening, will also be important for markets.

Qatar deadline

A Saudi-led bloc of nations isolating Qatar is meeting today to discuss their next move as the deadline for the country to comply with a tough list of demands expires. Sigmar Gabriel, Germany's foreign minister, said he expects Qatar's response to be rejected after he held two days of talks with both sides. The month-long crisis has seen about $15 billion wiped off Qatar's stock exchange and the country's credit outlook cut to negative watch by Moody's.

Markets quiet

Overnight, the MSCI AC Asia Pacific Index rose 0.2 percent, while Japan's Topix index gained 0.6 percent with automakers leading the advance as the yen pared gains against the dollar. In Europe, the Stoxx 600 Index was unchanged at 5:45 a.m. after closing 0.3 percent lower in a very quiet session yesterday. S&P 500 futures were also unchanged.

Eco data

Composite Purchasing Managers Index numbers for the euro area published this morning showed continued robust growth, with companies now struggling to hire workers fast enough to meet increasing demand. In the U.K., however, the services PMI fell to its lowest level in four months in a warning for the economic outlook. Later today, U.S. crude inventories data will be released, with expectations for a decrease of 2.5 million barrels. Oil was trading lower ahead of that release after Russia was said to oppose any proposal to deepen the OPEC-led production cuts.

Last Night in ASIA

North Korea claims successful missile test,
Gulf nations at an impasse and lots of data due out.
Here are some of the things people in markets are talking about.

ICBM

The U.N. Security Council is poised to hold an emergency hearing on Wednesday after North Korea claimed it successfully test-fired an intercontinental ballistic missile. The revelations are being seen as a move by Kim Jong Un to exploit recent divisions between the U.S. and China ahead of President Donald Trump and President Xi Jinping's meeting at the G-20 this week. South Korea’s currency and stocks fell on the reports regarding its northern, isolated neighbor.

Gulf Standoff

Qatari Foreign Minister Mohammed Al Thani said the 13 demands made by the Saudi-led alliance that cut off economic and diplomatic ties with the emirate a month ago are “neither reasonable nor actionable” ahead of the July 5 compliance deadline. Al Thani added that he wouldn’t make the nation’s response public — though he had briefed his German counterpart on their contents. German Foreign Minister Sigmar Gabriel — who had overseen talks between the Qatar and the Saudi-led bloc — said he expects the response to be rejected. Saudi Foreign Minister Adel Al-Jubeir said this deadline won’t be extended again, but Qatar is learning to cope with this isolation by its neighbors — and in some cases, strike back. Qatar Petroleum said it is now taking "legal actions" against Abu Dhabi National Oil Co., alleging that its condensate shipments have been halted. Despite the ongoing rift, the emirate is looking to maintain its place as the top supplier of natural gas. The crisis has taken its toll on Qatari equities; sovereign bonds have held up much better.