Global Fundamental Analysis 04/03/2020

OPENING CALL: The Australian share market is expected to open higher. The SPI200 futures contract expected to open 84 points down.


Foxconn Technology, Apple’s main iPhone assembler, said it expects the number of workers at its plants in mainland China to return to full seasonal level by the end of March if the coronavirus epidemic doesn’t worsen. 


The Federal Reserve cut its benchmark rate by a half percentage point, delivering a booster shot to stem potential economic disruptions from the coronavirus. The action marks the central bank’s first between policy meetings since the 2008 crisis. 


Overnight Summary




Australian Market

Australian shares closed 0.7% higher at 6435.7 despite shedding much of its gains after the country’s central bank cut the cash rate.  The benchmark S&P/ASX 200 had been as high as 6524.3 and was still more than 120 points ahead when the Reserve Bank of Australia cut the rate to a fresh record low of 0.5%. The index was up 44.2 points at the close. The financial sector led the afternoon selloff as lenders cut mortgage rates in a move that will put pressure on net interest margins. The big-four banks–Westpac, NAB, ANZ and Commonwealth — fell between 1.1% and 1.7% each.  


US Market

U.S. stocks slid intraday after the Federal Reserve’s interest-rate cut failed to assuage money managers fearful of the economic fallout from the coronavirus epidemic. Markets were volatile after the Fed’s announcement. Stocks initially shot higher, propelling the Dow Jones Industrial Average up more than 300 points. But within 15 minutes, stocks’ initial gains gave way to jerky up-and-down trading action-with the blue-chip average and Treasury yields tumbling after Fed Chair Jerome Powell acknowledged the limits of the central bank’s actions in a press conference.  



Gold futures rallied, with the haven metal posting its biggest daily percentage rise since June, as the Federal Reserve announced a surprise cut to interest rates, citing the risks to the economy from the COVID-19 epidemic.  

April gold on Comex picked up $49.60, or 3.1%, to settle at $1,644.40 an ounce – the largest one-day percentage rise since June 20, 2019, according to Dow Jones Market Data. Prices gained 1.8% on Monday after falling by nearly 5% on Friday-the biggest one-day percentage loss since the week ended June 20, 2013.  


Oil Futures

Oil futures finished modestly higher, off the day’s best level. Prices got a boost from expectations that major oil producers will agree to cut production at a meeting later this week, but an unexpected, inter-meeting interest-rate cut by the Federal Reserve fed worries over the economic impact of COVID-19. Oil’s pullback from earlier highs also came on the back of sharp losses in the U.S. stock market.  

April West Texas Intermediate oil rose 43 cents, or 0.9%, to settle at $47.18 a barrel on the New York Mercantile Exchange after trading as high as $48.66.  



The WSJ Dollar Index was recently down 0.45% to 90.87. Earlier, the U.S. dollar weakened versus major rivals after the Federal Reserve unexpectedly delivered a 50-basis-point rate cut in a response to risks to the economy posed by the global COVID-19 outbreak. The euro rose 0.5% to trade at $1.1191, while the U.S. dollar dropped 0.8% versus the Japanese currency to trade at 107.42 yen. 


European Markets

European stocks closed firmly in positive territory after a surprise interest-rate cut by the Federal Reserve. The Stoxx Europe 600 gained 1.4%, the FTSE 100 advanced 1% and the CAC-40 and DAX were both up 1.1%.  


Asian Markets

Japanese stocks ended lower, reversing earlier gains. The OECD earlier said it expects global economic growth at 2.4% this year, revising an earlier forecast for a 2.9% expansion. The Nikkei Stock Average closed 1.2% lower at 21082.73, weighed by construction-related stocks.  

South Korean stocks advanced for a second straight session on hopes for stimulus measures to counter the impact of the coronavirus epidemic. The benchmark Kospi finished 0.6% higher at 2014.15, paring earlier gains.  

Chinese stocks pared back some gains to close moderately higher. The benchmark Shanghai Composite Index closed 0.7% higher at 2992.90. The startup-heavy ChiNext Price Index, which rose as much as 4% intraday, ended 1.8% higher. The rally this week has been largely driven by expectations of greater stimulus from Beijing to protect growth.  

Hong Kong shares ended the session flat as investors remained on the sidelines. The benchmark Hang Seng Index fell 6.86 points to close at 26284.82.  

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Source - database | Page ID - 21683

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