Donald Trump says US military is "locked and loaded"

US President has fired another warning shot at North Korea, saying America is "locked and loaded" should Pyongyang "act unwisely".

The statement is the latest in a series of outbursts from the US President as he engages in a war of words with North Korea, which has threatened to strike Guam, a US army base in the Pacific.

Read more: Trump says he has not been "tough enough" on North Korea

Earlier this week, Trump said North Korea would face "fire and fury" if it took any military action against the US.

The North Koreans tested a missile last month that they said was capable of reaching mainland America, and they have warned Trump that his country was not "an invulnerable heavenly kingdom".

The US military has strategic bombers in Guam, and Pyongyang has said it is planning to launch missiles at the US island within days.

Tough talk shakes markets

The heated exchange between the two countries rattled Asian markets overnight, and traders are also feeling the pressure in Europe. At time of writing, the FTSE 100 and the Dax in Germany were down 1.13 per cent and 0.17 per cent respectively.

The South Korean Kospi index closed down 1.69 per cent at 2,319 and the Shanghai Composite index in China fell 1.63 per cent by the close to 3,208.

Full story: Donald Trump says US military is "locked and loaded": City A.M.