Geopolitical tensions escalated after North Korea’s ballistic missile test – Danske Bank

Geopolitical tensions are on the rise after North Korea reportedly tested another ballistic missile towards Japan and as Saudi Arabi stepped up its rhetoric in its diplomatic conflict with Qatar, points out Chief Analyst, Christin Tuxen at Danske Bank.

Key quotes

“Notably, North Korea has stepped up missile tests markedly this year and escalating tensions between the regime and the rest of the world could have significant market implications. The key thing to watch out for in our view is whether North Korea goes on to carry out a nuclear test: should that happen, a US pre-emptive strike could not be ruled out completely, although the bar for this should be quite high. This could have severe repercussions, as a retaliatory response from North Korea could be significant. Despite the geopolitical issues, oil prices are little changed with Brent still trading just off the USD50/bbl mark.”