Geopolitical tensions are once again at the forefront of markets on Monday, after North Korea successfully tested what is suspected to be a hydrogen bomb capable of riding a long-range missile, leading to reports that Pyongyang is preparing a major advancement in its nuclear capabilities. The US responded with threats to use its missile defence system, Thaad, which has never been used against an enemy before and which China sees as a threat to the region’s ‘strategic equilibrium’. South Korea’s President Moon has shown his support of this, calling for a review of US and South Korean military planning to counter the nuclear threat. President Trump has also threatened to increase economic sanctions and halt trade with any nation doing business with North Korea. Gold hit an 11-month high, while other haven assets including the yen and Treasuries rallied once again, as investors moved to safety. European stocks followed Asian equities lower, as investors move away from riskier assets.