The World Seems To Feel Safer After Trump-Kim Summit
(Kitco News) - Financial markets breathed a sigh of relief following DonaldTrump’s historic summit in Singapore with North Korean leader Kim Jong-un.
The S&P 500 rose 0.2%, spot gold fell by $3, U.S.10-year bond yields were up 75 basis points, and the U.S. dollar index remainedrelatively unchanged.
Tuesday marked the first time a sitting U.S. President and amember of the Kim dynasty met face to face.
According to a joint statement signed at the end of thesummit, both parties agreed on the complete denuclearization of the Koreanpeninsula, although few specific plans have been laid out on the removing NorthKorea’s nuclear arsenal.
“President Trump committed to provide security guarantees tothe DPRK [Democratic People’s Republic of Korea] and Chairman Kim Jong Unreaffirmed his firm and unwavering commitment to complete denuclearization ofthe Korean Peninsula,” the statement said.
Trump added at a press conference that denuclearizationwould start “very, very quickly.”
Tensions between the two nations have been the epicenter ofheightening geopolitical tensions last year, with North Korea taking centerstage in Trump administration’s foreign policy agenda.
While Tuesday’s summit saw markets react relatively calmly,doubts over whether or not the summit would actually take place in the past havecaused markets to tumble.
On May 24th, Trump cancelled his planned summitwith Kim on June 12th, sending the S&P 500 down 2% over thefollowing days.
One of the most surprising parts of the negotiations inSingapore is Trump’s willingness to halt joint military exercise with SouthKorea, which is a U.S. ally. The U.S. has previously ruled out a halt inmilitary exercises on the Korean peninsula as part of its military alliancewith Seoul.
Other agreements that have been signed include therecovering of POW/MIA remains and their immediate repatriation, as well as awillingness to “build a lasting and stable peace regime on the KoreanPeninsula.”
By David LinFor Kitco News
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