Global Fundamental Analysis 28/08/2020

Global Fundamental Analysis 28/08/2020, FP Markets

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

U.S. stocks closed mixed as the Federal Reserve signaled a policy shift over inflation. The yield on the benchmark 10-year U.S. Treasury note rose to 0.738% from 0.686% on Wednesday, extending this week’s multi-day selloff in U.S. government bonds. The WSJ Dollar Index was recently up 0.09% to 88.31. Crude-oil prices suffered their first loss in four sessions. Gold futures ended lower in a volatile session.

Overnight Summary



Australian Market

Australia’s S&P/ASX 200 index closed 0.2% higher at 6126.2 despite fading through the afternoon session. The benchmark S&P/ASX 200 index rose 0.7% at midday before falling away amid weakness from energy, utility, financial and tech stocks.


US Market

U.S. stocks closed mixed after Federal Reserve Chairman Jerome Powell said the central bank would abandon its policy of pre-emptively raising rates to head off inflation.

The Dow Jones Industrial Average rose 160 points, or 0.6%, to 28492. The S&P 500 climbed 0.2% — its fifth-straight record close. The technology-heavy Nasdaq Composite Index wobbled between small gains and losses, ending the session 0.3% lower.



Gold futures finished lower after a volatile session that saw prices move in either direction by as much as 2%.

December gold fell $19.90, or 1%, to settle at $1,932.60 an ounce. Prices traded as low as $1,914.70, but also as high as $1,987 during the session.


Oil Futures

Oil futures declined, putting an end to a three-session streak of gains in U.S. prices, as traders bet on a quick recovery for the energy market in the Gulf of Mexico region after one of strongest hurricanes in years made landfall near the heart of the U.S. refining industry.

West Texas Intermediate crude for October delivery declined by 35 cents, or 0.8%, to settle at $43.04 a barrel on the New York Mercantile Exchange. October Brent crude, the global benchmark, declined 55 cents, or 1.2%, to $45.09 a barrel on ICE Futures Europe.



Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1895 to lows near US$1.1767 and was near US$1.1820 at the US close. The Aussie dollar fell from highs near US72.89 cents to lows near US72.19 cents and was near US72.60 cents at the US close. And the Japanese yen fell from near 105.62 yen per US dollar to JPY106.68 and was near JPY106.55 at the US close.


European Markets

European share-markets fell on Thursday with the pan-European STOXX 600 index down by 0.6%. Bank stocks retreated 0.8% as European bond yields fell after the Fed’s announcement. The German Dax index lost 0.7%. The UK FTSE index closed lower by 0.8% with London-listed shares in Rio Tinto down by 1.8% and shares in BHP 1.6% lower.


Asian Markets

Earlier in the day in Asia, the Nikkei Stock Average ended lower as financial stocks weighed and amid speculation about prolonged low interest rates in the U.S.

China’s major stock benchmarks closed higher with the first-half earnings season due to wrap up in the coming days. The Shanghai Composite Index rose 0.6% to 3350.11, the Shenzhen Composite Index gained 1.0% while the startup-heavy ChiNext Price Index climbed 1.7%. Auto makers and food-and-beverages firms led gains on the Shanghai benchmark.

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