Asian shares dropped more than 1% yesterday amid continued tension with North Korea. Market participants cited profit-taking and increased concerns among investors as tensions rose between the United States and North Korea. Wall Street shares plummeted yesterday with S&P down almost 1.50 percent and Nasdaq slipping more than 2 percent.

An oversupply glut weighed on oil prices earlier despite greater than expected drawdowns in US crude oil inventories. With rising global tensions, with the nervous market starting to doubt recent falls in inventories.

The Federal Reserve needs to convince participants that further rate hikes are warranted as disappointing US economic data likely support reason to delay the rate hike until December. Jobs are still rising but inflation is lagging. PPI unexpectedly fell in July, indicating moderation in inflation. This following sluggish inflation and worries about consumer spending amid lukewarm wages and weak vehicle sales. CPI expectations have come up short the past four months. The CPI is expected to rise 0.2% for July. Today’s CPI figures will be crucial for the Fed. The Fed has shown a willingness for interest rate hikes, as long as we see an Inflation rise. Fed President Dudley gave a speech yesterday saying inflation should gradually move toward the Fed's 2% target and the Fed remains on track to raise interest rates.

Two FOMC Member are expected to speak today at 1340GMT and 1530GMT. Kaplan will speak about economic conditions and monetary policy at an annual continuing education event for accounting professionals. Kashkari will speak at the Independent Community Bankers of Minnesota Annual Convention.

EUR/USD was up to 1.1779 overnight while USD/JPY dropped to 108.90 amid growing risk adverse sentiment. Gold continues climbing and sits above $1’286 per ounce.