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Minutes of the last meeting of the Fed’s Monetary Policy Committee (FOMC) showed that there is no consensus on the timetable of future interest rate hikes, mainly due to uncertainties about continuously low inflationary pressure. Some central bankers pleaded to suspend interest rate hikes for the moment, while others pointed to the solid economic situation and necessary further interest rates.

The recovery on equity markets continued in the face of a temporary and still fragile easing in the conflict between the USA and North Korea. Sentiment was also brightened by positively surprising US economic data. Retail sales rose twice as much as expected in July. The New York Fed’s activity barometer, the Empire State Index, signaled significantly stronger growth in the US industrial sector.

After several states, above all China, have endeavored to achieve a deescalation of the conflict between the USA and North Korea, the mood on the financial markets has calmed down somewhat again at the beginning of the week. However, the current de-escalation could be deceptive and exchanges will continue to react sensitively to geopolitical uncertainties.

Continued tensions between the USA and North Korea remain at the heart of the financial markets at the beginning of this trading week. However, after China had called the regime in Pyongyang for restraint, the nervousness on Asia's stock markets seems to have settled somewhat. US President Donald Trump and China's state and party chairman Xi Jinping agreed in a discussion that North Korea "should end its provocative and heating behavior". However, in the face of uncertainties, investors will probably continue to avoid risks and prefer safe havens.