Stock markets are in a cautious mood amid continuing political tensions and ahead of a big week for central bankers.Worries about North Korea were put on the backburner last week amid the continuing turmoil at the White House and the terrorist attacks in Spain. But they could be back in focus with the US and South Korea holding military exercises this week. Craig Erlam, senior market analyst at Oanda, said:Europe is set for a slightly negative start on Monday, threatening to extend its losing streak to three sessions as political and geopolitical risk continue to weigh on risk appetite.Geopolitical risk could rear its ugly head again this week as the US and South Korea begin planned military exercises on Monday, just as tensions between the North and these two countries appear to have calmed. Should North Korea respond in kind, then we could see a repeat of the safe haven rush from a couple of weeks ago when the situation previously flared up between the countries.
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