Global Fundamental Analysis 18/09/2020

Global Fundamental Analysis 18/09/2020, FP Markets

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

U.S. stocks were lower, led by declines in the technology sector. The 10-year Treasury note yield edged down to 0.69%. The WSJ Dollar Index was recently down 0.16% to 87.81. Crude oil prices ended higher as OPEC+ emphasized its commitment to reach full output-cut compliance. Gold futures lost ground as traders reacted to Fed policy.

Overnight Summary




Australian Market

Australia’s S&P/ASX 200 index ended 1.2% lower at 5883.2 despite an unexpected drop in the unemployment rate in August. The benchmark index fell steadily throughout the session after the Fed said it plans to keep interest rates near zero until at least 2023.

All sectors closed lower, with the exception of utilities, which is typically defensive. The tech sector was the biggest loser, falling almost 3.0%.


US Market

U.S. stocks declined, hurt by weakness in the labor market as uncertainty over the coronavirus pandemic continues to weigh on hiring.

The S&P 500 dropped 0.8% to 3347 as of the 4 p.m. close of trading in New York. The Nasdaq Composite fell around 1.3%, pushing the tech-heavy index further into negative territory for the month. The Dow Jones Industrial Average, which rose Wednesday, dropped 0.5%, or 131 points, snapping a four-day win streak.



Gold futures finished with a loss of 1% as commodity investors reacted to the monetary policy statement from the Federal Reserve which indicated it intends to keep key interest rates near zero through 2023.

December gold lost $20.60, or nearly 1.1%, at $1,949.90 an ounce.


Oil Futures

Oil futures ended finished higher after the Organization of the Petroleum Exporting Countries and its allies emphasized their commitment to reach full compliance with pledged output cuts during a joint committee meeting.

West Texas Intermediate crude for October delivery on the New York Mercantile Exchange rose 81 cents, or 2%, to settle at $40.97 a barrel.



Major currencies were firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1755 to highs near US$1.1848 and was near US$1.1845 at the US close. The Aussie dollar rose from lows near US72.56 cents to highs near US73.15 cents and was near US73.12 cents at the US close. And the Japanese yen lifted from 105.03 yen per US dollar to JPY104.52 and was near JPY104.70 at the US close.


European Markets

European share markets closed lower on Thursday with the pan European STOXX 600 index down by 0.5%. Shares of mall operator Unibail-Rodamco-Westfield fell 10% after a €3.5 billion rights issue. The German Dax index lost 0.4%. And the UK FTSE index was down 0.5%. Bank of England policymakers said they were exploring negative interest rates to counter ongoing risks to the labour market, but maintained their key policy rate at 0.1%. In London trade, Rio Tinto (-1.2%) and BHP (-2.2%) shares both fell.


Asian Markets

Earlier in the day in Asia, the Nikkei Stock Average closed lower amid continuing concerns about a slow recovery from the corona-virus pandemic, especially for some sectors such as railway.

Mainland China’s major stock benchmarks ended the session mixed, as market momentum remained muted after snapping a multiday rally Wednesday. The benchmark Shanghai Composite Index fell 0.4% to settle at 3270.44, while the Shenzhen Composite Index added 0.1% to 2186.99. The ChiNext Price Index also strengthened, ending 0.1% higher at 2557.32. The food and beverage sector and consumer-services firms, including travel agencies and hotel operators, were the main losers.

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