Global Fundamental Analysis 25/08/2020

Global Fundamental Analysis 25/08/2020, FP Markets

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

U.S. stocks rose after the FDA issued an emergency-use approval for a potential treatment for Covid-19. The yield on the benchmark 10-year U.S. Treasury note ticked up to 0.649%. The WSJ Dollar Index rose to 88.65. Oil prices rose as two storms approach the Gulf of Mexico. Gold prices dropped amid the risk-on sentiment.

Overnight Summary



Australian Market

Australian shares recovered from an early struggle to rise 0.3% to 6129.6. The tech sector again led gains by the benchmark S&P/ASX 200 index, climbing 3.2% as After-pay, Appen and NEXTDC all hit record closes.


US Market

U.S. stocks advanced, giving the S&P 500 another record, as investors’ optimism was buoyed by a potential treatment for coronavirus.

The S&P 500 rose 1%, after closing at a new high Friday. It was the third record in the last five trading sessions. The Dow Jones Industrial Average climbed 1.4%, or 378 points, and the technology-heavy Nasdaq Composite Index rose 0.6% to its own fresh high.



Gold futures fell as global equity markets saw sharp gains fueled by optimism over a potential COVID-19 treatment, pushing prices for the metal to its lowest settlement in about a month.

December gold fell by $7.80, or 0.4%, to settle at $1,939.20 an ounce, That was the lowest finish for a most-active contract since July 27, according to Fact-Set data.


Oil Futures

Gasoline futures surged to their highest level since early March, lifted by energy supply disruptions caused by back-to-back storms that are on track to hit the Gulf of Mexico this week.

U.S. gasoline futures for delivery in September added 6.5% to $1.3671 a gallon on the New York Mercantile Exchange, posting their largest one-day advance since mid-May. They ended the day at their highest level since March 6.

U.S. crude-oil futures for October delivery, meanwhile, advanced 0.7% to $42.62 a barrel, while Brent crude, the global gauge for oil prices, gained 1.8% to $45.13 a barrel. Energy prices have pared some of their 2020 declines caused by the coronavirus in recent weeks but still remain well below where they started the year.



Major currencies eased from highs against the US dollar in European and US trade. The Euro fell from highs near US$1.1850 to lows near US$1.1785 and was near US$1.1790 at the US close. The Aussie dollar fell from highs near US72.05 cents to lows near US71.55 cents and was near US71.60 cents at the US close. And the Japanese yen eased from near 105.70 yen per US dollar to JPY105.98 and was near session lows at the US close.


European Markets

European share-markets recorded their best gains in almost two weeks on Monday. European investors were encouraged by reports that the US health regulator authorized the use of blood plasma from patients who have recovered from COVID-19 as a treatment. Shares in AstraZeneca Plc rose 2.1% after the Financial Times reported the US Trump administration was considering fast-tracking an experimental COVID-19 vaccine being developed by the company. Oil & gas stocks rose 3.4% on fears of weather-driven supply disruptions to US oil production. The pan-European STOXX 600 index lifted by 1.6%. The German Dax index gained 2.4%. And the UK FTSE index was higher by 1.7%. In London trade, shares in Rio Tinto rose by 1.0% and shares in BHP were up by 1.3%.


Asian Markets

China’s major stock benchmarks closed higher, led by the startup-heavy ChiNext Price Index, on which revised trading rules took effect for the first day. The ChiNext index gained 2.0%, the Shanghai Composite Index inched 0.2% higher to 3385.64 and the Shenzhen Composite Index added 1.3%.

Japanese stocks settled higher, led by gains in consumer, electronics and technology stocks as investors continued to bet on a more digitally connected society post-pandemic.

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Source - database | Page ID - 22059

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