Global Fundamental Analysis 27/08/2020

Global Fundamental Analysis 27/08/2020, FP Markets

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

U.S. stocks continued their recent climb, settling moderately higher. The WSJ Dollar Index slipped to 88.24. The yield on the 10-year Treasury was virtually unchanged, ending at 0.69%. Oil prices rose as Hurricane Laura continued its march toward Texas and Louisiana. Gold prices rose ahead of Fed Chairman Powell’s speech at Jackson Hole.

Overnight Summary



Australian Market

Australia’s S&P/ASX 200 Index dropped 0.7 per cent to 6116.4, with a late rally paring earlier losses.


US Market

The S&P 500 edged higher, nearing a fourth consecutive record, buoyed by data pointing to a U.S. economic recovery.

The broad stock-market index climbed 1.02% as of the 4 p.m. close of trading in New York. The Dow Jones Industrial Average turned slightly higher, up 0.3%.

The Nasdaq Composite also extended its recent record streak, up 1.7%, as tech stocks followed soon-to-be Dow component Salesforce higher.



Gold and silver futures tallied their highest finish in a week, as traders looked to Fed Chairman Jerome Powell’s coming speech at the Jackson Hole, Wyo., economic summit for the precious metals’ next big catalyst.

December gold rose $29.40, or 1.5%, to settle at $1,952.50 an ounce after touching a low of $1,908.40. The settlement was the highest for a most-active contract since Aug. 19, according to FactSet data. Prices fell 0.8% on Tuesday to market the lowest settlement for a most-active contract since July 24.

September silver , meanwhile, added $1.18, or 4.4%, at $27.449 an ounce, following a 1.3% decline in the prior session. Prices for the metal ended at their highest since Aug.18.


Oil Futures

U.S. benchmark oil prices rose 0.1% to $43.39 a barrel, marking a third straight session of increases and the highest closing price since March 5, as Hurricane Laura barreled toward the Texas and Louisiana coasts as a Category 4 storm.

Laura could make landfall tonight, and while the storm has so far boosted oil prices by cutting offshore oil production and reducing refinery activity, investors also say the reduced processing of fuels could bearishly lead to a huge build-up of U.S. crude-oil inventories.



Major currencies were mostly firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1775 to highs near US$1.1835 and was near US$1.1825 at the US close. The Aussie dollar rose from lows near US71.85 cents to highs near US72.40 cents and was near US72.30 cents at the US close. And the Japanese yen lifted from near 106.46 yen per US dollar to JPY105.95 and was near JPY106.00 at the US close.


European Markets

European share-markets rose on Wednesday with the pan-European STOXX 600 index up by 0.9%. Germany’s coalition parties agreed to extend measures to cushion the economic effects of the corona-virus crisis at a cost of up to 10 billion euros, while France is set to present its economic recovery plan on September 3. The German Dax index rose 1% while the UK FTSE index edged 0.1% higher. In London trade, shares in Rio Tinto rose by 1.6% and shares in BHP were up by 0.9%.


Asian Markets

China’s major stock benchmarks settled lower. The Shanghai Composite Index shed 1.3% to 3329.74 and the smaller Shenzhen Composite Index slid 1.9%, mainly dragged by electronics makers and defense companies. The startup-heavy ChiNext Price Index fell 2.1%, the first time it declined since new trading rules took effect Monday.

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