World stocks hit new record highs on Tuesday amid a continuation of Monday’s risk-on theme which unleashed a dramatic relief rally on easing North Korea tensions and signs that Hurricane Irma caused less damage than feared (which according to Keynesians should be GDP negative). The MSCI All-Country World Index gained 0.2%, hitting the highest on record with a fifth consecutive advance.

European equities headed for the longest winning streak in five months while S&P 500 futures extended on Monday’s record high, pointing to another all time high open. Meanwhile, the dollar struggled to build on a strong start to the week as concerns about lackluster inflation lingered before key U.S. data.

Europe’s Stoxx 600 Index gained for a fifth day, the longest run since April, up 0.6% hitting the highest level in 5 weeks, as the technology sector joined in the rally ahead of Apple iPhone unveiling later on Tuesday. Chip makers STMicroelectronics N.V. and Infineon Technologies AG were among big gainers, while the insurer index gained a further 0.3%, as insured property losses from Hurricane Irma’s are expected to be smaller than initially forecast.

S&P index futures also rose as North Korea stayed silent – for now – in the face of another round of sanctions. As the longest run since April, “the appetite for riskier assets that took hold on Monday was sustained more by a lack of bad news than any positive catalysts.”  So far there have been no further provocative developments from North Korea after the UN Security Council approved a watered-down proposal to punish the nation for its latest missile and nuclear tests. Meanwhile, Hurricane Irma damage estimates were revised sharply lower (remember when the worse the hurricane, the better for GDP? Apparently for stocks, no matter what the hurricane outcome, it’s all good). With a flat greenback, bonds across Europe followed Treasuries lower.

“The absence of walking into any North Korea-related headlines, the general feeling that the worst-case scenario from Hurricane Irma was avoided and with the more significant economic data reserved for later in the week too, markets seem to have breathed a collective big sigh of relief,” strategists including Craig Nicol at Deutsche Bank AG wrote in a note to clients.

In overnight geopolitical developments, Japan’s Defense Minister Onodera said Japan cannot rule out possibility of further provocation by North Korea and will stay on alert. Shortly prior, the UN Security Council unanimously voted to increase sanctions against North Korea, albeit substantially watered down from the original version proposed by the US and excluding an oil embargo or asset freezes of the government. The US Ambassador to the UN Haley said the US is willing to act alone to stop North Korea’s nuclear programme and that half-measures have not worked. There were also comments from South Korea which later stated that North Korea is technically ready for a nuclear test.

British consumer price inflation came in stronger than expected at 2.9 percent, offering more clues as to the Bank of England’s policy decision on Thursday, and sending the pound to the highest level against the USD, as cable rose as high as 1.328. The BOE has been struggling to keep inflation at 2 percent since Sterling tumbled in response to Britain voting to leave the European Union in June 2016, pressuring on consumer spending and living standards (more below).

Asia, too, was green across the board: Japan’s Topix index advanced 0.9 percent at the close in Tokyo. Australia’s S&P/ASX 200 Index added 0.6 percent. South Korea’s Kospi index rose 0.3 percent. The Hang Seng Index in Hong Kong and gauges in China fluctuated. The MSCI Asia Pacific Index climbed 0.4 percent. The Japanese yen fell 0.3 percent to 109.74 per dollar, the weakest in more than a week.

The dollar failed to maintain momentum after Monday’s 0.6 percent gain, with market focus turning to whether U.S. consumer-price data due Thursday has the potential to improve the greenback’s allure. The Bloomberg Dollar Spot Index swung between gains and losses as investors unwound risk-off positions, while the pound rallied on the back of faster-than-estimated U.K. inflation. Sterling rose to $1.3282, its highest level in a year, as data showed annual core inflation in Britain accelerated to 2.7 percent in August, the most since 2011. Profit-taking in euro-pound longs also helped cable push above the August highs, according to currency traders in Europe and London.

The strong U.K. data spurred an immediate repricing of Bank of England rate-increase odds. Based on MPC-dated overnight index swap rates, chances of a 25 basis point hike by the end of year have risen to 33 percent from 24 percent Monday. A tightening is fully priced in by end of summer next year. Risks are now skewed toward a hawkish shift in the BOE Monetary Policy Committee vote on Thursday, with more than two members now pushing for a rate increase, providing more support for the pound.

Over in China, the onshore yuan slumps by the most in six months against a trade-weighted currency basket amid a weaker central bank fixing and a dollar surge overnight. The Bloomberg replica of the CFETS RMB Index slumped 0.44%, the biggest drop since March 16, to 94.9385, just two days after reaching this year’s high on Monday. On Tuesday, the PBOC weakened its daily reference rate by 0.43%, the most since Jan. 9 and the first cut in 12 days, to 6.5277 per dollar. The fixing was weaker than the 6.5245 average of estimates from 18 traders and analysts surveyed by Bloomberg, and followed on Friday’s aggressive attempt by the PBOC to reignite volatility by invitine shorters into the currency after it cut reserve requirements from 20% to 0%.