US State Department: China may have conducted low-level nuclear test blasts

In a report released on Wednesday, the US State Department notified that China is likely to have secretly conducted low-level underground nuclear test explosions despite claiming to observe an international pact banning such blasts, per Reuters.

The Wall Street Journal (WSJ) first reported the findings, citing that it may further escalate the tensions between the US and China, especially after the US charged that the global COVID-19 pandemic resulted from Beijing’s mishandling of a 2019 outbreak.

The report, without providing evidence of a low-yield test, noted: “China’s possible preparation to operate its Lop Nur test site year-round, its use of explosive containment chambers, extensive excavation activities at Lop Nur and a lack of transparency on its nuclear testing activities … raise concerns regarding its adherence to the zero yield standard.”

Market reaction

In absence of any certainty on the global virus situation and its likely economic impact, the risk sentiment remains tepid, as the greenback continues to benefit from the increased safe-haven demand. The above piece of news will only add to the worsened market mood.

The riskier assets such as the stocks, equity futures and Antipodeans are flashing red while Gold trades rather flat but keeps 1700 mark amid risk-aversion.