An investor takes a photograph using his phone as he stands in front a board displaying stock prices at the Australian Securities Exchange (ASX) in Sydney, Australia. -Reuters
The dollar rose on Monday and world shares climbed back towards record highs, on relief that North Korea did not conduct a further missile test at the weekend when it celebrated its founding anniversary. A weakening of Irma over the United States also tempered demand for safer assets, the hurricane having caused a number of deaths and knocked out electricity to 3 million homes and businesses on its way up the Florida coast.
European shares started 0.75 percent higher as an official downgrading of Irma's strength lifted insurance firms. EU, while gold the yen and Treasuries RR dipped. Winning a reprieve from risk aversion, the dollar registered its biggest gains in the currency markets in ten days. It added 0.5 percent against its perceived safe-haven Japanese counterpart the yen JPY and clawed back ground against the high-flying euro as an ECB policymaker flagged caution about the single currency's recent rise.
"The good news was that the eye of Hurricane Irma took a path west of Miami and has since weakened to a Category 1 storm so that damage in Florida - whilst still severe... appears not to be quite as catastrophic as had been feared last week," said Daiwa Capital Markets strategist Chris Scicluna. "And thankfully there was no bad weekend news out of North Korea either."
Japan's Nikkei .N225 rose 1.4 percent after Pyongyang held a massive celebration to congratulate the nuclear scientists and technicians who steered the country's sixth and largest nuclear test a week earlier. The United States and its allies had been bracing for another long-range missile launch to mark the 69th anniversary of North Korea's founding on Saturday.
The sense of relief lifted E-Mini futures for the S&P 500 ESc1 by 0.5 percent, while yields on 10-year Treasury notes rose 3 basis points to 2.09 percent. South Korea's main index added 0.8 percent, while MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.4 percent.
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