22 October 2020
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Good morning, Australia

Craig James
20 July 2020

How’dy USA

In US economic data, housing starts rose 17.3% in June to a 1.186 million annual rate (survey 1.29m) with building permits up 2.1% to 1.241m (survey 1.29m). Consumer sentiment fell from 78.1 to 73.2 in July (survey 79.0)

US share markets were mixed on Friday as investors balanced the scope for more fiscal stimulus against the potential for more lockdowns. Shares in Goldman Sachs lost 1.5%, weighing on the Dow Jones index. Shares in Netflix lost 6.5% after the company gave a downbeat view on subscriber growth. The Dow Jones index fell by 63 points or 0.2%. But the S&P500 index rose by 0.3%. The Nasdaq index rose by 29 points or 0.3%. Over the week the Dow rose 2.3%; the S&P 500 rose by 1.2%; but the Nasdaq lost 1.1%.

US treasury bond prices were little changed on Friday. Investors fretted about the prospect for fresh lockdowns to stem virus cases. US Treasury will sell $17 billion in 20-year bonds and $14 billion in 10-year Treasury-Inflation Protected Securities next week. US 2-year yields were steady near 0.143% and US 10-year yields rose 1 point to near 0.623%. Over the week US 2-year and US 10-year yields both fell near 0.1 point.

Bonjour Europe

European share markets rose on Friday. Investors were awaiting the outcome of a European Union summit with leaders expected to agree on a 750 billion euro recovery fund. However, an agreement is far from assured. The pan-European STOXX 600 index rose by 0.2%. Gains in autos, commodity and technology stocks outweighed falls in banks, energy, and travel & leisure stocks. The German Dax index was up by 0.4% and the UK FTSE index closed 0.6% higher. In London trade shares in Rio Tinto rose by 2.4% with shares in BHP up by 2.9%.

Hello World!

Major currencies were firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1375 to highs near US$1.1435 and was near US$1.1425 at the US close. The Aussie dollar rose from lows near US69.70 cents to highs near US70.05 cents and was near US69.95 cents at the US close. The Japanese yen lifted from 107.27 yen per US dollar to JPY106.93 and was near JPY107.00 at the US close.

Global oil prices fell by 0.5% on Friday. Investors worried about fuel oil demand in the wake of a surge in coronavirus cases across the globe. Investors also continued to react to Thursday's decision by OPEC+ nations to trim record supply cuts. The Brent crude price fell by US23 cents or 0.5% to US$43.14 a barrel. And the US Nymex price lost US16 cents or 0.4% to US$40.59 a barrel. Over the week Brent fell by US10c or 0.2% and Nymex rose US4c or 0.1%.

Base metal prices fell by up to 2.0% on Friday with lead and zinc down the most. But copper bucked the trend, up by 0.3%. Over the week metals fell up to 2.6% with lead down the most. But copper rose 0.6% with tin up 0.1%.

The gold futures price rose by US$9.70 or 0.5% to US$1,810.00 an ounce. Spot gold was trading near US$1,809 an ounce at the US close. Over the week gold rose by US$8.10 an ounce or 0.4%. Iron ore rose by US10 cents or 0.1% to US$110.45 a tonne. Over the week iron ore rose by US$3.40 an ounce or 0.2%.

G’day Australia

In China, the loan prime rate decision is announced. In the US, no major data is expected.

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