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London Finance Show: North Korean missile launch less risk-off than previously

Core Finance show

Market commentator Matt Brown points out that North Korea’s latest ballistic missile launch, which overflew Japan earlier today, comes on the back of the UN Security Council voting unanimously to put restrictions in place against the rogue nation which some have said were actually “not tough enough”.

“Fat boy Kim is firing off these missiles, he’s sabre rattling” Brown says, but from a market perspective it hasn’t felt as much as a risk-off move as previously, and ahead of the weekend it is more a case of not adding any more risk.

The commentator noted that Bitcoin is also a big mover today, with the crypto-currency down 10% after one of the largest -  if not the largest - exchange in China decided to close for business, adding to the already bad week for Bitcoin holders after JPMorgan boss, Jamie Dimon came out and called it a “fraud”.

The FTSE Stock to Watch today is JD Wetherspoon PLC (LON:JDW) which has shot higher after the pubs operator’s  interim results, which provided “fantastic numbers” and a good read, Brown says, with its boss Tim Martin as vocal as always as a flagbearer for Brexit.

Among AIM stocks, Brown looks at DX Group (LON:DX.), with the parcels operator not performing well in a competitive market, but also hit today by an unfortunate accounting error which continues the firm’s  woes, with the shares dropping around 10%.

On the currencies front, sterling’s advance continues today, with the pound up at one year highs on the back of yesterday’s Bank of England rate hike hint.

Fundamental analyst Ronnie Chopra’s target of US$1.40 is looking far from silly now – indeed Brown says Chopra thinks sterling could be up at US$1.45 by the year end – while parity against the euro for the pound is looking “a long way over the Channel now”, according to the commentator.

It is also the 25th anniversary of ‘Black Wednesday’ when the pound was booted out of the European Exchange Rate Mechanism seeing investor George Soros make a mint, while the Bank of England and the UK government lost a fortune.

Brown says this is quite poignant given the Brexit negotiations going on at the moment, which is all about trade agreements and how currencies should be allowed to fluctuate.

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