Global Fundamental Analysis 06/11/2020

Global Fundamental Analysis 06/11/2020, FP Markets

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


U.S. stocks were higher for the fourth-straight day. The 10-year Treasury note yield fell 0.2 basis point to 0.77%, bouncing off its overnight low of 0.72%. The WSJ Dollar Index recently was down 0.94% to 87.38. Crude oil prices suffered their first loss in four sessions. Gold futures settled at a seven-week high as the U.S. dollar fell.


Australian Market

Australia’s S&P/ASX 200 index ended the session up 1.3% to 6139.6 as investors mulled the post-election likelihood of more political gridlock in the U.S. The benchmark index’s third gain in four sessions leaves it 3.6% higher for the week, and on the verge of wiping out last week’s 3.9% fall.


US Market

Democratic candidate Joe Biden is within striking distance of the presidency, potentially bringing to an end weeks of uncertainty about the U.S. election that has weighed on markets. Republicans have won enough seats to potentially retain control of the Senate, while Democrats appear poised to hold on to the House.

U.S. stocks jumped, on track for their sharpest weekly gains since April, as investors cheered the diminished prospects of higher corporate taxes under a split Congress.

The benchmark S&P 500 rose 2%, a day after it logged its biggest one-day advance since June. The index has climbed 7.4% so far this week. The Dow Jones Industrial Average rose 2%, paring an earlier gain of nearly 650 points.



Gold futures rallied, with prices settling at their highest level in nearly seven weeks, as the Bank of England boosted government bond buying, the U.S. dollar slumped, and investors watched results of the U.S. elections that appeared more likely to deliver a split government.

Gold got a boost when President Trump tweeted a call to stop vote-counting, said Adrian Ash, director of research at BullionVault. He “might be losing the election, but he hasn’t lost his knack for moving markets with a tweet,” said Mr. Ash.

December gold for delivery on Comex rose $50.60, or 2.7%, to settle at $1,946.80 an ounce – the highest finish for a most-active contract since Sept. 18, according to FactSet data. The day’s gain marked the largest one-day percentage rise since April.


Oil Futures

Oil futures fell to mark their first loss in four sessions.

“Oil has enjoyed a remarkable recovery this week” but was finally “running out of steam, with profit taking seemingly kicking in,” said Craig Erlam, senior market analyst at Oanda. West Texas Intermediate crude for December delivery fell 36 cents, or 0.9%, to settle at $38.79 a barrel on the New York Mercantile Exchange.



Major currencies were firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1726 to highs near US$1.1854 and was near US$1.1830 at the US close. The Aussie dollar rose from lows near US71.58 cents to highs near US72.89 cents and was near US72.85 cents at the US close. And the Japanese yen firmed from 104.45 yen per US dollar to JPY103.44 and was near JPY103.50 at the US close.


European Markets

European sharemarkets advanced on Thursday. The panEuropean STOXX 600 index gained 1.1%. The German Dax index rose 2%. The UK FTSE index lifted 0.4% after the Bank of England expanded its target stock of asset purchases to £895 billion and British Finance Minister Rishi Sunak extended his £200 billion COVID-19 furlough scheme. In London trade, shares in Rio Tinto (+1.2%) and BHP (+1%) both rose.


Asian Markets

Japan’s Nikkei Stock Average ended 1.7% higher at 24105.28, settling at its highest level since October 2018.

China stocks made strong gains, with some tech stocks rising sharply as Democrat Joe Biden’s lead in the U.S. electoral-vote count boosted hopes of less confrontational U.S.-China relations. The Shanghai Composite Index rose 1.3% to 3320.13, while the Shenzhen Composite Index added 1.7% and the ChiNext Price Index climbed 1.4%.

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