Asian Stocks Gain As Risk Appetite Endures, Bitcoin Surges

Talking Points

• North Korea fears eased further
• Stocks rallied across Asia and stocks tumbled
• Bitcoin made yet another new high as cryptocurrency market capitalization soars

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A further deepening of risk appetite in the face of cooler rhetoric between North Korea and the United States was the main feature of Asian trade Tuesday.

Perceived riskier markets were still in vogue with the usual havens losing their allure. US officials moved Monday to dampen rumors of imminent war between the world’s most powerful military and the rogue Southeast Asian State. The North Korean leadership for its part appears much less keen to talk about launching weapons in the direction of US Pacific territory Guam.

Stocks were all in the green, including the Nikkei which had wobbled Monday as investors returned from a holiday break. It closed up more than 1% with other Asian bourses seeing clear (if less impressive) gains. The US Dollar gained at the expense of the Japanese Yen, with the Australian Dollar also higher. It got a modest lift from the minutes of the Reserve Bank of Australia’s August 1 policy meeting. They looked forward to stronger global and domestic growth while sounding the now-customary warnings about stretched household balance sheets and, yes, the strength of the currency.

US interest rates were also back in focus after New York Federal Reserve President William Dudley told reporters he expects another increase this year if the economic data continue as robustly as he expects.

Gold prices returned recent gains while crude oil prices were steady in the Asian session. Both US crude and international benchmark Brent added about six cents/barrel following a tumble in Monday’s US session as the greenback revived and news of reductions in Chinese refining unsettled the market.

Bitcoin continued its astonishing August climb, surging above $4,400 and reportedly taking its total market capitalization up to $71.6 billion.

There’s plenty of life left in the global economic session Tuesday. UK consumer price numbers are on offer, as advance US retail sales and business inventory numbers.

--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter: @DavidCottleFX