Global Fundamental Analysis 19/06/2020

OPENING CALL: The Australian share market is expected to open higher. The Spi 200 contract to open 11 points up.


U.S. Unemployment Claims Edge Lower but Remain Historically High – The number of workers applying for and receiving unemployment benefits has stabilized at historically high levels, signs that while the labor market is healing hundreds of
thousands of workers are still losing their jobs each week. New applications for benefits edged lower by 58,000 to a seasonally adjusted 1.5 million in the week ended June 13, the Labor Department said Thursday. While it is the fewest weekly applications since mid-March, it also showed the pace of layoffs is no longer significantly easing.


Overnight Summary




Australian Market

Australian shares lost 0.9% to close at 5936.5 after data showed the country’s unemployment rate surged to a 19-year high of 7.1% in May. The benchmark S&P/ASX 200 index snapped a two-session winning streak amid data showing the worse-than-expected loss of 227,000 jobs over the month.


US Market

U.S. stocks wavered to a mixed close as investors weighed a rise in coronavirus infections in some states against signs of stabilization in the labor market. The S&P 500 ticked up less than 0.1%, while the Dow Jones Industrial Average dropped
0.2%, or 40 points, as of 4 p.m. Eastern time. The technology-heavy Nasdaq Composite added 0.3%. The broad-based S&P 500 index has climbed about 39% from its March low. But the march higher has been uneven, as investors consider an array of economic and health data, as well as news about potential vaccines.



Gold futures settled lower, finding haven-related interest in short supply as investors eye moves in the dollar and in global equities, setting prices up for a loss on the week. The metal pared some of its earlier declines after a report on weekly jobless claims
showed that the number of Americans seeking unemployment benefits in the latest week held nearly steady at 1.5 million, while the number of workers unemployed remains elevated, despite the U.S. economy showing signs of recovery from the COVID-19 pandemic.

August gold fell $4.50, or 0.3%, to settle at $1,731.10 an ounce on Comex. Gold futures have been trading in a $1,670 to $1,770 range for about two months despite a sharp fall in that time for the U.S. dollar against major currencies.


Oil Futures

Crude-oil prices finished higher after major producers at an OPEC-led meeting of the Joint Ministerial Monitoring Committee stressed the importance of full compliance with pledged production cuts and made moves to ensure that certain countries make up for failing to fully meet their reduction targets last month.

West Texas Intermediate crude for July delivery, the U.S. benchmark, climbed 88 cents, or 2.3%, to settle at $38.84 a barrel on the New York Mercantile Exchange. Global benchmark Brent oil for August delivery picked up 80 cents, or 2%, at $41.51 a barrel on ICE Futures Europe.



Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.1260 to lows near US$1.1185 and was near US$1.1200 at the US close. The Aussie dollar fell from highs near US69.00 cents to lows near US68.35 cents and was near US68.45 cents at the US close. The Japanese yen rose from JPY107.11 per US dollar to JPY106.66 and was near JPY106.95 at the US close.


European Markets

European sharemarkets were lower on Thursday. The panEuropean STOXX 600 index fell by 0.7%. Shares of German payments company Wirecard plummeted 61.8% after again delaying the publication of its 2019 financial report. The German Dax index fell by 0.8%. The UK FTSE index was down 0.5%. The Bank of England expanded its bond buying program by £100 billion to counter the virus slump. In London trade shares in Rio Tinto (-1.8%) and BHP (-1.6%) both fell.


Asian Markets

Earlier in the day in Asia, Japanese stocks ended lower, weighed by financial and auto stocks, as uncertainty persisted over long-term economic implications of the Covid-19 pandemic. The Nikkei Stock Average fell 0.4% to 22355.46.
Mainland Chinese stocks made slight gains, extending an uptrend since Tuesday’s sharp rebound which was driven by the Fed’s latest round of stimulus. The benchmark Shanghai Composite Index rose 0.1% to settle at 2939.32.

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