According to Fox News, another North Korean ICBM launch is expected as soon as tonight. Each additional test highlights that Trump's current strategy of containing Kim appears to not be working, as the North Korean continues to defy the US and China’s demands to stop.
*NORTH KOREA ICBM LAUNCH EXPECTED AS SOON AS WEDNESDAY NIGHT - U.S. OFFICIALS: FOX NEWS
According to Citi, the news "may well affect risk sentiment – perhaps depending upon the success of the test, the estimated range of the missile." The bank adds to expect headlines from Trump, China and North and South Korea. In terms of markets, keep an eye on USDJPY, USDKRW, AsiaFX generally and perhaps even gold (plus local equity markets).
The ICBM test is set to take place just days before the U.S. is set to conduct another missile interception test this weekend, with the latest exercise based on a remote Alaskan island and coming amid the growing ballistic missile threat from North Korea.
According to Fox News, a notice put out by the U.S. Coast Guard last week warns of “hazardous operations,” saying “The Alaska Aerospace Corporation is conducting a rocket launch from the Kodiak Narrow Cape Launch Facility, located on Kodiak Island, Alaska.” They are warning vessels to steer clear of several areas between Alaska and Hawaii during the launch which is scheduled for July 29.
The U.S. military is set to conduct a test of the Terminal High Altitude Area Defense (THAAD) missile shield at the Pacific Spaceport Complex-Alaska "soon," Pentagon spokesman Capt. Jeff Davis told Fox News on Monday.
Department of Defense spokesman Lt. Col. Chris Logan declined to comment on the plan or its connection to the ongoing threat from North Korea. The U.S. has conducted a spate of successful missile intercept tests in recent months as Pyongyang has executed offensive missile testing.
So far, Citi's assessment of the latest ICBM test having a "negative impact" on risk is proving false.