Global Fundamental Analysis 11/03/2020

OPENING CALL: The Australian share market is expected to open higher. The SPI200 futures contract expected to open 34 points up.

 
U.S. Treasury bond yields were showing some gains. The yield on the benchmark 10-year Treasury was hovering around 0.609%, up from 0.501% at the close on Monday

 

Overnight Summary

 
 

EACH MARKET IN FOCUS

 

Australian Market

Australia’s stock market closed 3.1% higher after a whipsaw session that began with coronavirus panic and ended with optimism over global fiscal stimulus. The benchmark S&P/ASX 200 dropped 3.8% in early trade to briefly enter bear market territory before buyers stepped in, apparently in response to U.S. President Donald

Trump’s announcement of major economic measures to address the epidemic’s impact. Financial stocks led local gains with a 4.7% rise, followed by tech’s 4.0% jump. The beaten-down energy sector, which had led early losses following oil’s biggest one-day price decline in 29 years, closed 3.4% higher.  

 

US Market

Stocks rose in frenetic trading intraday after a stunning selloff at the start of the week hit major indexes with their biggest one-day declines since the financial crisis. Tuesday’s session has so far been a volatile one. The market opened sharply higher, with the Dow Jones Industrial Average soaring nearly 1,000 points within the first few minutes of the opening bell. Stocks then erased the entirety of their gains before midday, only to charge higher again in the final hours of trading.  

White House officials are considering potential measures including a payroll-tax cut and help for hourly wage earners, while Japan’s government unveiled a multibillion-dollar plan to help businesses that have been affected by the coronavirus. 

The S&P was recently up 2.6%. At its lowest point Tuesday, the index was just 0.9% away from ending an 11-year bull market run that overcame issues ranging from a global trade war to the first-ever downgrade of the U.S.’ credit rating.  

The Dow industrials, which came as close as 0.2% away from a bear market-or a 20% drop from a recent high-were recently up 614 points, or 2.6%, to 24465. The Nasdaq Composite was up 2.7%. Within the stock market, sectors that had been hit the hardest in recent days were among the biggest gainers Tuesday.  

 

Commodities

Gold futures settled lower for the first time in four sessions as U.S. stocks looked to rebound from their steepest one-day loss since 2008 and as government bond yields jumped off historic lows seen after a coronavirus and crude-oil sparked plunge on Monday.  

Gold for April delivery on Comex lost $15.40, or 0.9%, to settle at $1,660.30 an ounce, after posting a slight 0.2% gain on Monday.  May silver , fell by 9.9 cents, or 0.6%, at $16.955 an ounce, after falling 1.2% a day ago.  

 

Oil Futures

U.S. benchmark oil prices ended the session 10.4% higher at $34.36/bbl., retracing a sizable portion of their 25% slide on Monday as Russian energy minister Novak signaled a willingness to return to talks with OPEC regarding possible production cuts to offset demand shrinkage from coronavirus.  

 

Forex

The dollar was regaining some strength, with the Wall Street Journal Dollar index up 0.94% so far, after falling 0.58% on Monday.  

 

European Markets

Stoxx Europe 600 ended down 1.1%, erasing the entirety of its rally from earlier in the session. Analysts have been worried about the potential for the coronavirus to cause more economic disruption on the continent. Italy placed its entire national territory under quarantine, the most dramatic step by any country so far to contain the epidemic.  

 

Asian Markets

Chinese stocks rebounded after falling sharply in the previous session following a global equity-market rout triggered by a crash in crude prices. The benchmark Shanghai Composite Index rose 1.8% to close at 2996.76

Japanese stocks rose, reversing early losses, amid hopes for policy stimulus. The Nikkei Stock Average closed up 0.9% at 19867.12. The yen’s weakness also likely helped to lift local equities. Electrical appliances makers were mostly higher, with Hitachi gaining 1.1%.  

South Korean stocks finished higher, regaining ground after steep declines in the past two sessions. The benchmark Kospi rose 0.4% to close at 1962.93. Trading was mixed, as gains in chemical, tech and refinery stocks outweighed falls in auto, airline and retail stocks.




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