Global Fundamental Analysis 30/07/2020

Global Fundamental Analysis 30/07/2020, FP Markets

OPENING CALL: The Australian share market is to open higher. 

U.S. stocks closed higher after the Federal Reserve signaled support for the economy. The yield on the 10-year Treasury note was largely unchanged from 0.581% on Tuesday.

The dollar slipped, with the WSJ Dollar Index, which tracks the U.S. currency against those of major trading partners, falling 0.2%. Crude-oil prices settled higher as government data showed the biggest U.S. crude supply decline of the year. Gold prices logged a record close — up for a ninth-straight session.

 

Overnight Summary

EACH MARKET IN FOCUS

Australian Market

Australia’s S&P/ASX 200 index closed 0.2% lower at 6006.4, giving away early gains amid a record quarterly slump in inflation and new domestic coronavirus travel restrictions.

US Market

U.S. stocks climbed as Federal Reserve officials reiterated their support for an economy battered by the coronavirus pandemic.

The S&P 500 ticked up 1.3%, with all 11 sectors in the index higher as of the 4 p.m. close of trading in New York. The Dow Jones Industrial Average rose about 0.6%. The tech-heavy Nasdaq Composite rose 1.4%.

Commodities

Gold futures tallied a ninth gain in a row to settle at another record, then moved even higher after the Federal Open Market Committee reiterated plans to keep interest rates near zero until the economy sees further improvement.

Gold for August delivery was at $1,958.40 an ounce in electronic trading shortly after the Fed statement. It posted a gain of $8.80, or nearly 0.5%, to settle at a record of $1,953.40 an ounce on Comex ahead of the Fed news.

Oil Futures

U.S. benchmark oil prices ended higher after U.S. government data showed a more-than-10-million-barrel weekly decline in U.S. crude – the largest so far this year.

West Texas Intermediate crude for September delivery on the New York Mercantile Exchange rose 23 cents, or 0.6%, to settle at $41.27 a barrel. It was trading at $41.32 just ahead of the EIA supply data.

Forex

Major currencies were mixed against the US dollar in European and US trade. The Euro rose from near US$1.1715 to US$1.1800 and was near US$1.1785 at the US close. The Aussie dollar held between US71.55 cents and US71.95 cents and was near US71.85 cents at the US close. The Japanese yen held between 104.75 yen per US dollar and JPY105.18 and was near JPY105.00 at the US close.

European Markets

European share markets were little changed on Wednesday ahead of the Federal Reserve decision. The pan-European STOXX 600 and the German Dax both fell 0.1%. And the UK FTSE was up by less than 0.1%.

Reuters noted: “Drugmaker GlaxoSmithKline fell 3.2% as it missed second-quarter profit estimates after lower sales of its existing vaccines, while lender Barclays dropped 6.1% as it set aside a higher than expected 1.6 billion pounds (US$2.1 billion) to cover a possible rise in loan losses.” In London trade shares in Rio Tinto rose by 0.7% after releasing its profit result while shares in BHP fell by 0.3%.

Asian Markets

Earlier in the day in Asia, Japanese stocks ended 1.1% lower at 22397.11, amid weak earnings by several big-cap companies, reflecting the challenging business environment brought about by the Covid-19 pandemic.

Mainland China’s stock market benchmarks extended early morning gains to finish in positive territory as sentiment was buoyed by higher foreign capital inflows into Chinese markets. The Shanghai Composite Index closed up 2.1% at 3294.55, while the smaller Shenzhen Composite Index was 2.9% higher at 2236.95. The ChiNext Price Index, an indicator for the performance of startups and emerging industries, rose the most, gaining 3.8% to 2767.40.

  • Global Fundamental Analysis 30/07/2020, FP Markets
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