• “H-bomb of justice”
  • Oil continues rout
  • China wobbling
  • Fed minutes this afternoon

North Korea claims that it has tested its first hydrogen bomb today, triggering a 5.1 magnitude earthquake with the shock of the blast. Bloomberg reports that “there seems to be little for markets to worry about, as previous North Korean nuclear tests have led to – at worst – only short-lived selloffs.” The real worry here is that according to KCNA this “H-bomb of justice” is aimed directly at the United States, saying that is protection from the “ever-growing nuclear threat and blackmail by the U.S.-led hostile forces.”

In other bad news, investors are starting to see further easing from China unlikely, as the People’s Bank of China (PBOC) allowed the yuan to depreciate and fall to a five-year low. The equity markets in China are not happy with the lack of government support, although China has extended its ban on short-sellers (was set to expire next week). China is removing the carrot and retaining the stick…

Crude oil prices continue to tick lower and lower, with WTI futures breaching $35 per barrel this morning. This has the Canadian dollar, already at 13-year lows, getting very close to rocketing through 1.41 this morning.