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Without any news, the Fed meeting turned out to be a painless event, allowing investors to focus on the other issue of the moment: the earnings season. In this chapter, the news has been favorable, with the vast majority of companies reporting numbers that beat forecasts.

According to the latest news, Secretary of State for Defense Jim Mattis and US Secretary of State Rex Tillerson will have reported that the Trump Administration continues to seek diplomatic resolutions with Pyongyang. Still, investors should continue to monitor developments in relation to the situation on the Korean Peninsula.

The lowering of the risk of a US-North Korean military conflict has restored some confidence to European markets that have started the week with significant gains, recovering from last week's losses.

The minutes of the last meeting of the FED, held on 25 and 26 July, will be published today. In this event, the Federal Reserve kept the fed-funds interest rate range unchanged at 1.00% -1.25% and signaled that the balance-sheet normalization process will soon begin. The first step will most likely be the reduction of asset purchases with the money coming from repayment of maturing bonds. To justify this decision is the positive view the FED has of the economy. With the economy operating at full employment, with the creation of jobs being labeled “solid” even with the 4.40% unemployment rate, with consumption and investment growing, the Central Bank believes that are gathered the conditions to reduce its balance sheet (amounting to 4 500 000 M.USD). According to CNBC, with these economic data published yesterday, expectations for a rise in interest rates in December increased to 54% from 37% the previous day.

During today's session, investors should react to the publication of the minutes of the last Fed meeting. On the other hand, while fears about tensions between North Korea and the US have softened, worries about the situation Politics in the US worsened after US President Donald Trump had closed two consultative bodies on economic matters yesterday in the face of the resignation of prominent businessmen on board.

Fears about the terrorist attack in Barcelona, as well as political uncertainty in the US and still some geopolitical tension shall led investors to opt for safe haven assets.

European markets were downtrending, reflecting the behavior of the US market, as well as renewed fears about tensions between the US and Korea, with the news that the US and South Korea Start their annual military exercises today, which are expected to last for 10 days between 21 and 31 August and will be a test of North Korea’s behavior. Although planned for some time now, these exercises come at a delicate time, after several weeks of an exchange of war rhetoric between Washington and Pyongyang that drew the worst fears, although last week tensions have subsided with statements by Kim Jong that said Which for now would contain his plans. Expectations are mostly concentrated at the Jackson Hole Conference at the end of the week.

These days, the environment in the global stock markets is marked by an expectation of the Annual Central Bank Conference to be held in Jackson Hole later this week, although most analysts are not expecting Janet Yellen and Mario Draghi , Presidents of the FED and the ECB, to bring to the market great news about the conduct of their monetary policies.

Mario Draghi’s intervention in Lindau (Germany) will be closely monitored and may lead to some volatility in the markets.

In a speech delivered yesterday in Lindau, Germany, Mario Draghi gave no indication of the next steps in terms of monetary policy, only emphasizing that the recent financial crisis forced economists to readjust the existing economic models.

The monetary policy outlook on both sides of the Atlantic is now focused on the gradual removal of the ECB’s current expansionary measures and on the normalization of the balance sheet by the FED, after the Central Bank has begun the cycle of rising interest rates.

The US market ended higher on Friday. The day was marked by the Conference of Central Banks in Jackson Hole, but more specifically by the interventions of the Presidents of the FED, Janet Yellen, and the ECB, Mario Draghi. These speeches were long awaited, but neither offered any significant signal on the conduct of their respective monetary policies. Janet Yellen focused her speech on banking regulation and improvements in the US economy, while Mario Draghi focused more on his concern about protectionism.

North Korea's firing of a missile over Japan has had an immediate impact on the financial markets. Stocks reacted negatively, and the Dollar fell to a four-month low against the Yen, although it subsequently recovered. Investors opted for safe haven assets, such as Gold, US Treasuries and the Yen. The Gold price has peaked since November last year.

In the pre-opening, European markets were trading on positive ground, as investors followed the stance on Wall Street and Asian markets. Attentions seem to be shifting away from the aggravation of geopolitical tensions to other issues, with developments related to Brexit. Today is the third day of negotiations between the UK and the European Union. In the business field, to highlight the results of the French Carrefour, so the retail sector should attract attention.

In exchange terms, the higher the inflation, the greater the positive impact on the Euro. On the contrary, a lower reading of inflation may lead, with all other factors being equal, to a devaluation of the common currency. However, since August has a calming effect and a consequent decrease in volumes traded, the reaction of investors to a news or event is more pronounced as it is exacerbated by the lack of liquidity. If this is the case, the reaction of the exchange market to events or the publication of economic indicators (such as inflation) will be more extreme and, by reflection, their impact on the stock markets will be greater.

On the last day of the month, the US market closed higher, this being also the trend of Wall Street in August. The session was marked by the release of some economic indicators, but the expectation was focused on the employment report that will only be known today.

Gold appreciated 0.95% while the Swiss Franc rose about 0.70% against the Dollar.

In the past, the reaction of financial markets to events related to North Korea was sometimes abrupt but always momentary. The reason for this pattern is that the incidents with this country were isolated and generally followed by some calming or at least by some impasse. However, the current situation has been characterized by a continuous series of events, each one being more tense than the previous one. It is in this uninterrupted accumulation of tension that the threat to the financial markets may lie. Another factor not to be excluded is the possibility that some unforeseeable incidents might occur that would oppose the North Korean and American or South Korean armed forces, which could precipitate the situation.

Although investors are focusing this week on the reopening of the Congress, the developments in the Korean situation, the ECB’s tomorrow meeting and the FED are remaing as elements in their decisions. At the sectoral level, the tourism and insurance sectors suffered losses due to the approach of Hurricane Irma to Florida, a few days after Hurricane Harvey. According to meteorologists, Hurricane Irma may be the strongest hurricane recorded in the Atlantic, with winds of 300 km / h. According to analysts’ projections, in an extreme scenario, the passage of the two hurricanes could cause damages of about 130,000 M.USD.

Shares of insurers, reinsurers and tour operators have again come under some pressure as analysts update their calculations of Hurricane Harvey’s damage and are trying to anticipate what hurricane Irma will cause in the Caribbean and in the southern US.