Global Fundamental Analysis 25/06/2020

OPENING CALL: The Australian share market is expected to open lower. The SPI futures contract expected to open lower 92 points down.  


The IMF said on Wednesday the global economy will shrink 4.9% this year, compared with its April estimate of 3%. The international lending institution downgraded its 2020 forecast for all major economies, citing economic data that was even grimmer than expected in April.


The Trump administration is considering expanding and raising tariffs on $7.5 billion of imports from the European Union and U.K. that it first imposed last year, part of a long-running dispute at the World Trade Organization that faults European countries for subsidies to aircraft manufacturer Airbus SE.


Overnight Summary




Australian Market

Australian shares closed 0.2% higher at 5965.7, as tech stocks Afterpay, Appen and Xero all hit fresh record highs.


US Market

U.S. stocks tumbled as pockets of coronavirus infections emerged in several states, intensifying fears of officials having to reinstate lockdown measures around the country. The Dow Jones Industrial Average fell 721 points, or 2.8%, as of the 4 p.m. close of trading in New York. The S&P 500 declined 2.7%, and the Nasdaq Composite lost 2.3%.  All 11 of the S&P 500’s sectors were in the red.



Gold futures finished lower a day after their highest finish since 2012 amid a strengthening dollar, but a retreat in equities amid reports of rising coronavirus cases in many U.S. states helped to limit losses for the safe haven asset.
August gold fell $6.90, or 0.4%, to settle at $1,775.10 an ounce, after spending the day trading between a low of $1,770.60 and a high of $1,796.10.


Oil Futures

U.S. benchmark oil prices ended the session 5.8% lower at $38.01 a barrel, the biggest one-day decline in more than two weeks, as investors got rattled by U.S. crude inventories climbing to another record high, and new coronavirus infections potentially impeding the demand recovery.



Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1325 to lows near US$1.1250 and was near lows at the US close. The Aussie dollar fell from highs near US69.45 cents to lows near US68.65 cents and was near US68.70 cents at the US close. The Japanese yen eased from near JPY106.45 per US dollar to JPY107.05 and was near the weakest levels at the US close


European Markets

European sharemarkets slumped on Wednesday as investors worried about a lift in virus cases across the globe. Also depressing sentiment was news that the US was weighing up whether to impose tariffs on products from Britain, France, Spain and Germany. The pan-European STOXX 600 index was down 2.8%. The German Dax index lost 3.4% despite a record rise in the Ifo business sentiment survey in June. The UK FTSE index fell 3.1%, In London trade shares in Rio Tinto fell 2.3% and shares in BHP down by 3.0 %.


Asian Markets

China’s major stock market indexes closed slightly higher ahead of the Dragon Boat Festival. The benchmark Shanghai Composite Index ended 0.3% higher at 2979.55, while the smaller Shenzhen Composite Index added 0.28 point. The ChiNext Price Index was up 0.43 point, clinching a nine-session winning streak.

Japanese stocks ended slightly lower, declining 0.1% to 22534.32, weighed by falls in retail and consumer stocks, as concerns about a slow pace of recovery from the Covid-19 pandemic persisted.

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