Markets stay on edge as North Korea crisis remains in the spotlight.
Here are 4 tips for today's trading. This will help you decide where you should invest and what to look for:
1. Dollar drops on North Korea tension
The dollar remained lower against a basket of the other major currencies on Wednesday amid heightened tensions in the Korean peninsula.
Investors remained on edge after South Korea’s President Moon Jae-in warned Wednesday that the crisis on the Korean peninsula risks becoming “uncontrollable”, following Sunday’s nuclear test by North Korea.
Russia’s Vladmir Putin joined in the international condemnation of Pyongyang’s actions on Wednesday but maintained the stance that a solution can only be reached via diplomatic measures.
The geopolitical tension has kept global equities on edge, with the Dow tumbling more than 200 points on its first day of trading after the Labor Day holiday, as investors rotate into safe haven assets.
Gold prices held just below their highest level in around a year on Wednesday, drawing support from lingering tensions on the Korean peninsula.
2. Economic data ahead
After a series of data in the prior session showed that service sector activity from China to Europe generally remained robust in August, the U.S. will step up to the plate with the release of the ISM non-manufacturing purchasing managers’ index (PMI) at 16:00 GMT.
Economists forecast the expansion in the service sector to pick up with the reading rising to 55.4 from the prior 53.9. Also on the docket, the Federal Reserve will release its Beige Book, that shows the state of economic conditions in each of the 12 Fed districts, at 18:00 GMT.
3. Global stocks on red territory
Global equities traded broadly lower on Wednesday as market nerves continued to rattle over geopolitical tensions.
U.S. futures pointed to a flat open on Wednesday as the stocks gathered breath after the prior session’s slide that wiped more than 200 points off the Dow.
Elsewhere, European bourses underwent a third day of losses as weak German factory orders added to geopolitical tension and investors showed caution one day ahead of the European Central Bank’s monetary policy decision.
Earlier, Asian shares closed mostly lower as Japan’s Nikkei 225 and South Korea’s KOSPI remained on alert. China’s Shanghai Composite managed to pocket minimal gains.
Meanwhile, The Bank of Canada's interest rate decision is due at 14:00 GMT on Wednesday, with most experts expecting the central bank to hold its benchmark rate at 0.75%.
The BoC hiked rates for the first time in seven years at its previous meeting in July and left the door wide open to further moves. Investors are fully pricing in at least one more rate increase by the end of this year, and at least one more in 2018.
4. Oil recovery continues
Oil prices continued to drift higher on Wednesday, after rallying around 3% in the prior session, as investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products to weigh what the impact of Harvey was on supply and demand.
Industry group the American Petroleum Institute is due to release its weekly report at 20:30 GMT.
Official data from the Energy Information Administration will be released Thursday, amid forecasts for an oil-stock jump of around 4.7 million barrels. The reports come out one day later than usual due to the U.S. Labor Day holiday on Monday.
