29 September 2020
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Good morning, Australia

Craig James
17 August 2020

How’dy USA

In US economic data, retail sales rose 1.2% in July (survey +1.9%). Industrial production rose by 3% in July (survey +3%). Business inventories fell 1.1% in June (survey -1.2%). Consumer confidence rose from 72.5 to 72.8 in August. Unit labour costs rose by 12.2% in the June quarter (survey +6.2%) with productivity up 7.3% (survey +1.5%).

US share markets were mixed on Friday. While retail sales in July fell short of forecasts, production met expectations. Shares in chip maker Applied Materials rose 3.9% after it forecast fourth-quarter revenue above analyst estimates. The Dow Jones index rose by 34 points or 0.1%. The S&P500 index fell by less than 0.1%. And the Nasdaq index fell by 23 points or 0.2%. For the week, the Dow rose by 1.8%; the S&P 500 rose 0.6%; and the Nasdaq rose by 0.1%.

US treasury bond prices rose on Friday (yields lower). Investors squared positions after a week of record issuance of treasuries. US 2-year yields fell by 2 points to 0.147% and US 10-year yields fell by 1 point to 0.709%. Over the week US 2-year yields rose by 2 points and US 10-year yields rose by 14 points.

Bonjour Europe

European share markets finished lower in thin trade on Friday. Travel stocks fell after the UK added more countries to its quarantine list. The pan-European STOXX 600 index was down 1.2% with travel & leisure stocks down 2.3%. Lacklustre retail sales data in the US and China weighed on investor sentiment. The German Dax index fell by 0.7%. And the UK FTSE index lost 1.6%. In London trade, shares in Rio Tinto fell by 1.0% and shares in BHP closed lower by 0.5%.

Hello World!

Major currencies were firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1785 to highs near US$1.1850 and was near US$1.1840 at the US close. The Aussie dollar rose from lows near US71.35 cents to highs near US71.75 cents and was near US71.70 cents at the US close. And the Japanese yen lifted from 106.90 yen per US dollar to JPY106.45 and was near JPY106.60 at the US close.

Global oil prices fell modestly on Friday on concerns about global oil demand given fresh quarantine restrictions in Europe. An OPEC+ panel meets on Wednesday to review the market. The Brent crude price fell by US16 cents or 0.4% to US$44.80 a barrel. The US Nymex price lost US23 cents or 0.5% to US$42.01 a barrel. Over the week Brent rose by 0.9% and Nymex rose by 1.9%.

Base metal prices were mixed on the London Metal Exchange on Friday. Aluminium fell 1% and zinc lost 0.3%. Other metals rose, led by nickel and copper. Over the week metals fell by up to 1.8%, led by zinc while lead was up 2.2% and copper rose by 1.2%

The gold futures price fell by US$20.60 or 1.0% to US$1,949.80 an ounce. Spot gold was trading near US$1,944 an ounce at the US close. Over the week gold fell by US$78.20 an ounce or 3.9%. Iron ore rose by US$1.00 or 0.8% to US$121.75 a tonne. Over the week iron ore rose by US$2.90 or 2.4%.

G’day Australia

In Australia, provisional overseas travel data for July is released. In the US, the New York Empire State manufacturing index is released with the NAHB housing market index and capital flows data.

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