North Korea on Sunday denounced the new sanctions imposed two days earlier by the U.N. Security Council after Pyongyang conducted a ninth ballistic missile test this year in defiance of earlier U.N. resolutions.
On Friday, the U.N. Security Council unanimously approved adding 14 North Korean individuals and four North Korean companies or organizations to its blacklist over the country’s weapons program.
In a statement carried by the official Korean Central News Agency, a North Korean Foreign Ministry spokesman accused the Security Council of enforcing double standards in responding to global nuclear threats.
“The U.S. steps up its military buildup including modernization of nuclear weapons just in order to obtain exclusive and permanent possession of the most sophisticated weapon system in the world. But other country can’t be allowed to test or launch any object which goes with the words of nuclear or ‘ballistic.’ That is really the height of shameless arrogance, self-righteousness and double standards,” the statement said.
The 14 individuals newly added to the global sanctions blacklist include Cho Il U, who is believed to be in charge of overseas espionage operations, and Jo Wong Won, a close aide to North Korean leader Kim Jong Un as vice director of the ruling Workers’ Party of Korea’s Organization and Guidance Department.
Two weeks ago we asked a question: maybe behind all the rhetoric and constant (ab)use of sophisticated terms like “gamma”, “vega”, CTAs, risk-parity, vol-neutral, central bank vol-suppression, (inverse) VIX ETFs and so forth to explain why despite the surging political uncertainty in recent years, and especially since the US election…
… global equity volatility, both implied and realized, has tumbled to record lows, sliding below levels not even seen before the 2008 financial crisis, there was a far simpler reason for the plunge in vol: trading was slowly grinding to a halt.
That’s what Goldman Sachs found when looking at 13F filings in Q1, when it emerged that the gross portfolio turnover of hedge funds had retreated to a record low of just 28%. In other words, few if any of the “smart money” was actually trading in size.
The technical indicators warn that the US dollar is stretched, but the combination of disappointing auto sales and jobs report may deny it the interest rate support needed to facilitate a resumption of the bull market. While there are many observers talking about the abdication of the US from its global leadership role given the decision to pull out of the Paris Accord and the TPP, we think the dollar’s performance can be explained by changing perceptions about the pace of US economic activity, the direction of inflation, and prospects for significant tax reform and infrastructure spending.
There is a light US economic calendar in the week ahead, and the quiet period ahead of the June 13-14 FOMC meeting means that investors are unlikely to get much guidance from officials. The focus will be squarely on Europe with the ECB meeting and the UK election.
The Dollar Index finished the week at new lows for the year, and just above the 61.8% retracement objective of the rally from the lows seen in May last year (96.45). A convincing break brings two technical levels into view. The first is around 95.20. It is a measuring objective of the old head and shoulder pattern that had been formed between December 2016 and March 2017. The second is near 94.20. It is the 38.2% retracement objective of the Dollar Index’s 2012-2014 lows near 78.60.
The euro appreciated for the sixth week of the past eight. Nearly three-quarters of the 0.7% gain on the week were scored on the back of the disappointing US jobs report. Before the weekend, it posted its highest close since last September, as works its way closer to the spike high last November ($1.13). The strength of the close warns of risk of a gap higher opening in Asia on June 5. Given the proximity of $1.1300, current volatility, and momentum, an upside break cannot be ruled out. A break of $1.1300 could signal a move to $1.1400-$1.1425.