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(Bloomberg) --

Risk-on markets defy trade war, disarming North Korea no small task, and Theresa May faces fresh crisis. Here are some of the things people in markets are talking about today.

So last-quarter

Friday marked an escalation in the burgeoning trade war between the world’s two largest economies – the collective global market reaction was a shrug, with U.S. stock futures firmly up this morning. The lack of panic at the impositions of tariffs on $34 billion more of Chinese goods, plus the Asian nation’s tit-for-tat response, could well be a case of sell-the-rumor and buy-the-fact. Or maybe it’s just too soon to price-in the economic fallout. As markets await President Trump’s next move -- he pledged to respond to any retaliation from Beijing -- there are reasons for concern. European leaders gathering in France over the weekend are on the warpath, a clutch of companies have already hit by the latest duties, and haven flows into bonds are likely. Still, for now, the fears appear so last quarter: Emerging-market assets are rebounding while traders will start turning their attention to earnings season, which begins this week.

Not so easy

Donald Trump made a lot of his sit down with North Korea’s Kim Jong Un, but it looks like getting Pyongyang to give up its nuclear weapons is going to take more than a little facetime with the U.S. president. Secretary of State Mike Pompeo has summed up his 27 hours in the North Korean capital as “productive,” but the regime itself called the visit “regretful.” In a more than 1,200-word statement published after Pompeo’s departure a North Korean foreign ministry spokesman said America “never mentioned the issue of establishing a peace regime on the Korean Peninsula, which is essential for defusing tension and preventing a war.” South Korea’s so-called peace stocks -- a group of companies that stand to benefit from increased economic ties with North Korea -- slumped on Monday, even as Asian equities broadly rallied.

Yet another crisis

Harmony at the top of the U.K. government lasted all of 48 hours. On Sunday evening, Brexit Secretary David Davis and his deputy resigned in protest at British Prime Minister Theresa May’s plans for a soft exit from the European Union. A junior minister followed suit, according to reports. The departures are a hammer blow to May and her supporters, who started the weekend claiming to have unified her warring cabinet around a Brexit plan that would keep the U.K. tied to EU rules for goods and adopting a close customs arrangement with the other 27 member countries. With Davis’ replacement already announced, perhaps markets are used to Brexit-related turmoil. The pound gained 0.4 percent as of 6:10 a.m. Eastern Time. 

Markets buoyant

Overnight, the MSCI Asia Pacific Index advanced 1.2 percent, while Japan’s Topix index closed 1.2 percent higher as the yen traded little changed. China’s Shanghai Composite Index climbed 2.5 percent. In Europe, the Stoxx 600 Index added 0.6 percent, and the euro rose. S&P 500 futures pointed to a higher open, the 10-year Treasury yield was at 2.85 percent and gold gained.

Supreme pick

Trump says he’ll announce his pick to replace Supreme Court Justice Anthony Kennedy, who’s retiring from the top U.S. court after 30 years. Appeals court Judge Thomas Hardiman was solidly in the mix as of Sunday after being first runner-up a year ago, said three people familiar with the process. Judge Brett Kavanaugh looked to have the inside track within the White House last week but may have hit a snag.  “An exceptional person will be chosen,’’ Trump promised Sunday evening on Twitter.

What we’ve been reading

This is what caught our eye over the last 24 hours.

• Vintage Porsches touted by German bankers as bund alternative.
• Iceland moves to fix pay gap.
• Recession-proof currencies JPMorgan Chase & Co. wants you to buy.
• Four boys rescued from Thai cave in race against time as monsoon begins.
• Fears of an inverted bond curve could be self-fulfilling.
• After years of quantitative easing, get ready for QT. 
• Brazil’s most popular politician languishes in jail months before election.

To contact the editor responsible for this story: Cecile Gutscher at cgutscher@bloomberg.net, Sid Verma

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