Global Fundamental Analysis 04/06/2020

OPENING CALL: The Australian share market is expected to open higher. The Spi 200 contract to open  73 points higher.


OPEC delegates said the production agreement is a sign that many of the world’s largest oil producers are confident that oil demand will return quickly as coronavirus lockdown restrictions ease around the world.


China’s services sector emerged from a three-month slump to record strong growth in May, while its counterparts in the U.S. and rest of the world saw further declines in activity as lockdowns began to ease.


Overnight Summary




Australian Market

The Aussie market rally is continuing on Thursday but is abating. Local shares are still climbing for a fourth day in a row and the ASX 200 briefly breached 6,000 points for the first time since March 9. But the index is now only 30 points
or 0.5% higher at 5,972, having peaked at 6,040 earlier.


US Market

Stocks rose as social unrest across the U.S. showed signs of calming and investors bet economic activity will improve with the ebbing of coronavirus infections and additional government stimulus.
The S&P 500 advanced 1.4% as of the 4 p.m. close of trading in New York. The Dow Jones Industrial Average added about 527 points, or 2.1%. The technology-heavy Nasdaq Composite gained 0.8%, climbing to within 2% of February’s all-time high.

Stimulus measures from governments and central banks in recent weeks have also opened the floodgates on cheap money, which is making its way into financial markets and boosting asset prices, investors say. President Trump plans to meet with senior advisers as soon as this week to discuss policy options for the next coronavirus relief package as the administration prepares for negotiations with Congress, according to a senior administration official.



Gold prices ended at their lowest in more than three weeks, unable to find traction as demand for equities picked up and data showing smaller-than-expected job losses in the U.S. private sector dulled haven-related demand for the precious metal.  Gold for August delivery on Comex lost $29.20, or 1.7%, to settle at $1,704.80 an ounce, with the most-active contract registering a third straight session decline. Prices posted the lowest finish since May 11, FactSet data show.
Meanwhile, July silver declined by 30 cents, or nearly 1.7%, at $17.958 an ounce on Comex.


Oil Futures

U.S. benchmark oil prices climbed 1.3% to $37.29 a barrel, the highest closing price since March 6, after unnamed OPEC delegates said the Saudis and Russians have agreed to extend an output cut deal through July that was aimed at offsetting a collapse in demand due to the coronavirus.
Though some details still need to be ironed out, the news helped keep oil prices on an upward trend–WTI prices have risen four of the past five sessions. It also made it easier for investors to shrug off a mostly bearish weekly EIA report
that revealed demand for fuel in the U.S. remains very low despite the lifting of some coronavirus lockdowns.



The U.S. dollar weakened against most major currencies, including 0.6% against the euro, but strengthened 0.2% against the yen, which retreated against other majors.  The euro again strengthened broadly ahead of an ECB policy meeting tomorrow.
The WSJ Dollar Index fell 0.3%.


European Markets

European sharemarkets rose on Wednesday on economic recovery hopes. Insurers rose 6.8% after AXA in France (up 10.4%) said it would pay a dividend. The autos sector rose 4.4%, banks rose 4.2%. Shares in Renault rose 10.5% after it finalised a 5 billion euro ($5.60 billion) loan from the French government. The panEuropean STOXX 600 index lifted by 2.5%. The German Dax index rose by 3.9% to be 9.5% below the record high. The UK FTSE index lifted 2.6%. In London trade shares of Rio Tinto rose 1.7% with BHP up 1.4%


Asian Markets

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Source - database | Page ID - 21687

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