Global shares mostly lower on rising unease over North Korea

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USA producer prices unexpectedly fell in July, recording their biggest drop in almost a year, while another set showed the number of Americans filing for unemployment benefits unexpectedly rose last week. Reuters data show a 28-percent chance for a hike after the Fed's December meeting.

Until this week, the equity market had managed to shake off negative news, including previous saber-rattling over North Korea and failures in Washington to pass high-profile bills, such as repealing and replacing Obamacare.

The risk-off tone triggered by the increase in tension between the United States and North Korea yesterday picked back up during today's U.S. session.

With Japanese markets closed for a public holiday, Hong Kong led the downward charge in Asia-Pacific as the Hang Seng lost more than two percent.

The Swiss franc and the Japanese yen are often sought in times of geopolitical tension and have logged big gains against the dollar this week after U.S. President Donald Trump warned North Korea that it would face "fire and fury" if it threatened the United States. TMX Group Ltd was up 3.2 percent to C$68.02, while Quebecor Inc added 4.3 percent to C$45.20 and Canadian Tire Corp Ltd climbed 5.7 percent to C$149.89.

European markets were also struggling amid the simmering political stand-off, with the Cac 40 in France dropping 1.4% and Germany's Dax tumbling by 1.1%.

Below that level lies another key technical chart support level for the dollar at 108.13 yen, a trough the US currency k plumbed in mid-April.

Global benchmark Brent lost 0.7 percent to $51.53, after Thursday's 1.5 percent drop.

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The price of oil was also 0.3% ahead at 52.29 USA dollars a barrel, with stockpiles coming under pressure from falling crude oil imports and record processing at American refineries.

"Both (PPI measures) were well below consensus and give us no hope that consumer price inflation is going to materially beat expectations", said Chris Weston, chief market strategist at IG Markets. However, the early gains were short-lived as the New Zealand dollar tumbled to the lowest since July 18 to last trade at $0.7278.

Sterling was last trading at $1.3009, up 0.27 percent on the day.

The latest US CPI data will also be an important market focus on Friday and there will be a constant threat of choppy trading conditions given a lack of liquidity. Gold and bond prices were headed higher.

Materials, a sector that includes gold producers and other resource-based companies, was the lone gainer among the index's 10 main sectors, rising 0.7 percent.

USA crude futures extended losses from Thursday, when they tumbled 2 percent on fears of slowing demand and lingering concerns over a global oversupply. The market was waiting f or USA consumer inflation data on Friday that would offer more clues about future Fed decisions.

US crude fell 0.41 percent to $48.39 per barrel and Brent was last at $51.68, down 0.42 percent on the day.

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