Global Fundamental Analysis 06/08/2020

Global Fundamental Analysis 06/08/2020, FP Markets

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


U.S. stocks rose on hopes for a stimulus deal by the end of the week. The yield on the 10-year Treasury ticked up to 0.549%. The WSJ Dollar Index fell 0.37% to 88.30. Oil prices rose after inventories posted another sharp drop. Gold prices extended their run to hit a fresh record high.


Overnight Summary




Australian Market

Australian shares dropped 0.6% to 6001.3 despite miners rallying on a surge in gold prices. Only the materials sector stayed out of the red as the benchmark S&P/ASX 200 index declined amid pessimism about local economic growth prospects.


US Market

U.S. stocks rose after White House negotiators said they aim to reach a deal on a new corona-virus relief package by the end of the week.

The S&P 500 gained 0.64% as of the 4 p.m. close of trading in New York. The tech-heavy Nasdaq Composite added 0.52%. The Dow Jones Industrial Average advanced 1.4%, or about 373 points, boosted by a big gain in shares of Walt Disney.



Gold prices ended sharply higher, extending a record run for the precious metal that has helped it log gains for four straight days and eclipse a historical milestone above $2,000.

December gold rose $34.70, or 1.4%, at $2,049.30 an ounce, after a similar surge on Tuesday. Gold prices have gained already about 3.3% so far this week.


Oil Futures

U.S. oil prices settled 1.2% higher at $42.19 a barrel, the highest closing price since March 5, after the U.S. reported another sharp drop in commercial crude-oil inventories.

The EIA said U.S. stockpiles of crude fell 7.4 million barrels last week following an even larger decline the week before that.



Major currencies were firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1800 to highs near US$1.1905 and was near US$1.1855 at the US close. The Aussie dollar rose from lows near US71.70 cents to highs near US72.40 cents and was near US71.90 cents at the US close. The Japanese yen rose from 105.86 yen per US dollar to JPY105.32 and was near JPY105.60 at the US close.


European Markets

European sharemarkets rose on Wednesday with the pan-European STOXX 600 index up by 0.5%. Reuters reported that “Positive earnings reports and a surge in commodities shares lifted European stock markets on Wednesday, but losses in defensive sectors and worries about surging corona-virus cases globally tempered the mood.”The measure of euro zone business activity also grew modestly in July. The mining index rose 4% and travel & leisure rose 3.25% but food & beverage fell 1%, healthcare lost 0.8% and telecom fell 0.7%. The German Dax index rose by 0.5%. And the UK FTSE index rose by 1.1%. In London trade, shares in Rio Tinto rose by 3.9% and shares in BHP rose by 4.7%.


Asian Markets

Chinese stocks settled higher. The benchmark Shanghai Composite Index rose 0.2% to 3377.56, extending an upturn to the fourth straight session. The Shenzhen Composite Index and the startup-heavy ChiNext Price Index each rebounded from yesterday’s losses, with the former gaining 0.8% to 2318.92 and the latter climbing 1.0% to 2860.24. Defense and engineering suppliers led gains.

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