Global Fundamental Analysis 04/12/2020

Global Fundamental Analysis 04/12/2020, FP Markets

Opening Call: The Australian share market is to open higher.

U.S. stocks were mixed ahead of Friday’s monthly jobs report. The yield on the 10-year Treasury ticked lower to 0.91%. The WSJ Dollar Index fell to 85.7. Oil futures settled higher after OPEC+ agreed to a minimal build in crude output. Gold prices rose for the third session in a row amid lingering dollar weakness.

Australian Market

Australia’s S&P/ASX 200 index rose 0.4% in the wake of gains by commodity stocks. Gains of 3.8% by materials and 1.5% by energy more than offset weakness elsewhere.

US Market

U.S. stocks were mixed as weekly jobless claims declined and investors looked ahead to Friday’s monthly jobs report.  

The S&P 500 was down 0.1% as of the 4 p.m. close of trading in New York, a day after the broad-market index closed at another all-time high. The Dow Jones Industrial Average added 0.3%. The Nasdaq Composite rose 0.2%.

Commodities

Gold futures climbed for a third-straight day, rising 0.7% to settle at $1,842.30 an ounce.

Persistent weakness in the U.S. dollar and growing hope that an impasse among entrenched parties in Washington on another coronavirus relief deal will be broken provided support for the precious metal.

Oil Futures

WTI oil prices settled just shy of a nine-month-high, closing 0.8% higher at $45.64 a barrel after OPEC and Russia said they’d start raising production in January by a small amount.

The group of major oil producers said they would lift production by 500,000 barrels-per-day next month, which only slightly reduces their emergency production-cut deal agreed to when the coronavirus pandemic began.

Forex

Major currencies were mostly stronger against the US dollar in European and US trade. The Euro rose from lows near US$1.2100 to highs near US$1.2175 and was near US$1.2140 in late US trade. The Aussie dollar rose from lows near US74 cents to near US74.50 cents and was near US74.40c in late US trade. The Japanese yen rose from near 104.50 yen per US dollar to JPY103.67 and was near JPY103.87 in late US trade.

European Markets

European sharemarkets were mixed on Thursday. Mining stocks led the gains. Shares in Rolls Royce rose 15.5% on reports that it was considering a re-entry into the narrow-body jetliner market. The pan-European STOXX 600 index was flat while the German Dax index lost 0.5%. But the UK FTSE index rose by 0.4% to a 6-month high. A weak report on euro zone business activity eighed on mainland European markets. In London trade shares in Rio Tinto rose by 2.7% while BHP rose by 2.2%.

Asian Markets

 Earlier Thursday, mainland China’s major stock benchmarks settled mixed. The Shanghai Composite Index was down 0.2%, while the Shenzhen Composite Index closed flat and the ChiNext Price Index added 1.1%.

Miners and smelters of copper and other nonferrous metals retreated on stronger metal prices The Hang Seng Index gained 0.7%, amid hopes for U.S. fiscal stimulus and progress in vaccine trials, said Jingyi Pan, a market strategist for IG.

The Nikkei Stock Average ended flat amid mixed trade. Investors will likely keep an eye on reports of possible government plans to ban sales of new gasoline-engine cars by the mid-2030s.

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