North Korea conducted its sixth nuclear test - Nomura

Analysts at Nomura noted that North Korea conducted its sixth nuclear test today.

Key Quotes:

"We see this latest provocation as in line with our base case – that tensions will remain elevated, yet contained, for some time. 

We believe room for diplomatic engagement is now rather limited and acknowledge that the risks of a US military intervention or miscalculations by Pyongyang are rising. 

 We will closely monitor geopolitical developments, especially the US and Chinese responses and any further provocation by North Korea. 

For now, we maintain our below-consensus view on South Korea’s economic outlook (2018 GDP growth: Nomura 2.3%, Consensus: 2.6%, Bank of Korea: 2.9%). 

We continue to expect a flexible FX policy, fiscal stimulus and a delayed normalisation of monetary policy in South Korea."