7 August 2020
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Good morning, Australia

Craig James
13 July 2020

Monday, 13 July, 2020

In US economic data, producer prices fell 0.2% in June (survey (+0.2%) with core prices (excludes food and energy) down by 0.3% (survey: +0.2%).

How’dy USA

US share markets rose on Friday. Investors were encouraged by news that Gilead's remdesivir drug was found to significantly improve clinical recovery and reduced the risk of death in COVID-19 patients. Shares in Gilead rose 2.2%. Shares in Netflix rose 8.1% on a broker upgrade. The Dow Jones index rose by 369 points or 1.4%. The S&P500 index rose 1.1%. And the Nasdaq index lifted 70 points or 0.7% to another record closing high. Over the week the Dow rose by 1%, the S&P 500 gained 1.8% and the Nasdaq lifted 4%.

US treasury bond prices fell on Friday (yields higher). Stocks were favoured over bonds on positive news of a drug to treat COVID-19 patients. US 2-year yields rose 1 point to 0.157%, and US 10-year yields rose by 4 points to near 0.643%. Over the week US 2 -year yields were largely unchanged while US 10-year yields fell 3 points.

Major currencies were mostly firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1255 to highs near US$1.1325 and was near US$1.1300 at the US close. The Aussie dollar rose from lows near US69.25 cents to highs near US69.70 cents and was near US69.50 cents at the US close. The Japanese yen held between 106.60 yen per US dollar and JPY106.95 and was near JPY 106.90 at the US close.

Bonjour Europe

European share markets closed higher on Friday. Investors focussed on encouraging industrial output data in Italy and France rather than a spike in coronavirus cases across the globe. Italian shares led the way, up 1.3%. Banks, autos and food & beverage stocks rose the most. The pan-European STOXX 600 index rose by 0.9%. The UK FTSE index gained 0.8%. And the German Dax rose by 1.2%. In London trade shares in Rio Tinto rose 0.1% while shares in BHP rose by 0.3%.

Hello World!

Major currencies were mostly firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1255 to highs near US$1.1325 and was near US$1.1300 at the US close. The Aussie dollar rose from lows near US69.25 cents to highs near US69.70 cents and was near US69.50 cents at the US close. The Japanese yen held between 106.60 yen per US dollar and JPY106.95 and was near JPY 106.90 at the US close.

Global oil prices rose on Friday after the International Energy Agency lifted its 2020 forecast for global oil demand. Also, the number of oil rigs operating in the US fell for the 10th week in a row to record lows. The Brent crude price rose by US89 cents or 2.1% to US$43.24 a barrel. The US Nymex price rose by US93 cents or 2.3% to US$40.55 a barrel. Over the week Brent crude rose 1% while Nymex fell 0.2%.

Base metal prices were mostly higher on Friday with nickel up the most, gaining 2.1%. But tin was the exception, down 0.2%. Over the week metals rose between 2.8% and 8.4% with tin up the least and zinc up the most.

The gold futures price fell by US$1.90 or 0.1% to US$1,801.90 an ounce. Spot gold was trading near US$1,798 an ounce at the US close. Over the week gold rose US$11.90 or 0.7%. Iron ore was unchanged on Friday at US$107.05 a tonne. Over the week iron ore rose by US$5.85 or 5.8%.

G’day Australia

In Australia, May data on tourist arrivals and departures is released with credit and debit card lending figures. In the US, the monthly budget statement is due with consumer inflation expectations.

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