Score another diplomatic victory for Trump, whose hard line negotiating tactic appears to have generated a dramatic – and favorable for market – outcome. Moments ago futures spiked, 10Y yields jumped and the USDJPY bounced about 106 on what the FT dubbed a “diplomatic breakthrough” that North and South Korea have agreed to hold direct talks between their leaders with North Korea signalling it is willing to abandon its nuclear program “if regime security can be guaranteed.”
- NKOREA OPEN TO DENUCLEARIZE IF REGIME SAFETY GUARANTEED: SKOREA
The headlines come from South Korean National Security Office special envoy Chung Eui-yong, who is speaking to reporters in Seoul after returning from Pyongyang. Remember he and another envoy, National Intelligence Service chief Suh Hoon met North Korean leader Kim Jong Un in Pyongyang on Monday. Chung confirms that North Korea is indeed ready to stop the jawboning and negotiate:
- Kim Jong Un open to frank talks with U.S. for denuclearization: Chung
- North Korea to suspend provocations during talks: Chung
- Promises not to use any weapons against South Korea: Chung
Next step: a summit in April between the two neighbors where details will be ironed out: “North Korea, South Korea agree to hold summit in April”, Chung says. Pyongyang vowed not to test any ballistic missiles or make further provocations during talks, according Chung clarified.
The easing of tensions between the two Koreas and this clearly positive geopolitical development has triggered a broad based risk-on move. Fixed income is selling off sharply here, with Bunds flying. As the spot KRW market is closed, the NDF space is in focus. The 1m NDF has traded from 1076.0 to 1070.8 at time of print. USDJPY is spiking higher at 106.10 at print. This move may have legs especially as early NY begins to come in
The question now is whether this unexpected diplomatic victory for Trump will further empower him to demand similar concessions on the trade side, and launch the “trade wars”, even as the market is now fully convinced that the US president will backtrack.
https://www.zerohedge.com/news/2018-03-06/north-korea-ready-denuclearize-if-regime-safety-assured
“Kim Jong Un open to frank talks with U.S. for denuclearization: Chung
North Korea to suspend provocations during talks: Chung
Promises not to use any weapons against South Korea: Chung”
For major concessions.
Count on it.
I’m sorry, how is this a breakthrough or “good thing”? I’m no commie, but I do believe in a nations right to defend itself just as much as an individual’s. North Korea is a failed state because of commie policies and crippling sanctions. But it’s not north korea that poses a threat to the world, it’s the United States of amerisrael. We need only take a look at other nations that have disarmed “for the sake of peace or security” to know what comes next. Although i dont believe this will happen with north korea because china pretty much pulls their strings. I’ve said a long time ago the so called tension with north korea was a ruse and would amount to nothing. This is all business between commies and fascists. I have to wonder if this will be used to somehow paint Iran, Syria or other nations as histile and “unwilling to cooperate for peace and stability”. But let me just end with one of my favorite quotes of all time, those who would trade liberty for security deserve neither.
Hey everyone, I think I just heard the fat North Korean boy who cried wolf again.
Same rhetoric repeating itself. Then a missile launches by North Korea and then the talks end and then the whole story repeats itself again. Anyone else getting bored of this game?