21 October 2020
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Good morning, Australia

Craig James
21 September 2020

How’dy USA

In US economic data, the Conference Board leading index rose by 1.2% in August (survey: +1.3%). The preliminary University of Michigan consumer sentiment index lifted from 74.1 to 78.9 in September (survey: 75). The current account deficit widened from US$111.5 billion to US$170.5bn in the June quarter (survey: US$157.9bn deficit).

US share markets fell on Friday, dragged lower by technology shares. Shares in Apple fell 3.2%, Alphabet (Google) lost 2.4%, Amazon lost 1.8% and Microsoft fell 1.2%. The Dow Jones index fell by 245 points or 0.9%. The S&P500 index lost 1.1% and the Nasdaq fell by 117 points or 1.1%. Over the week, the Dow fell 0.03%; S&P 500 fell 0.6%; and the Nasdaq lost 0.6%.

US treasury bond prices fell on Friday (yields higher). US 2-year yields rose 1 point to near 0.14% and US 10-year yields rose by 2 points to 0.697%. For the week, US 2-year yields rose by 1 point and US 10-year yields rose by 3 points.

Bonjour Europe

European share markets closed lower on Friday with the panEuropean STOXX 600 index down by 0.7%. Travel and leisure lost 3.15% in response to a lift in coronavirus cases across the continent. Banking shares lost 2.6% as global central banks pledged to leave rates at low levels for an extended period. Shares in Caixabank fell 2.2% after it agreed to buy state-owned Bankia (shares down 4.8%) for 4.3 billion euros (US$5.1 billion) to create Spain's biggest domestic bank. The German Dax index and the UK FTSE index both lost 0.7%. In London trade, Rio Tinto rose by 0.3% with shares in BHP up by 0.5%.

Hello World!

Major currencies were mixed against the US dollar in European and US trade. The Euro held between US$1.1830 and highs near US$1.1870 and was near US$1.1835 at the US close. The Aussie dollar held between US72.80 cents and US73.25 cents and was near US72.90 cents at the US close. And the Japanese yen lifted from 104.82 yen per US dollar to JPY104.26 and was near JPY104.55 at the US close.

Global oil prices were mixed on Friday. In the Gulf of Mexico, US producers started rebooting rigs following a five-day closure due to Hurricane Sally. But traders were watching a new tropical depression in the region that could become a hurricane. The Brent crude price fell by US15 cents or 0.3% to US$43.15 a barrel. The US Nymex price rose by US14 cents or 0.3% to US$41.11 a barrel. Over the week, Brent rose by US$3.32 or 8.3% with Nymex up US$3.78 or 10.1%.

Base metal prices were mixed on Friday. Zinc rose by 1% and other metals rose by up to 0.7% but nickel lost 1.2% with tin down 0.5%. For the week, zinc rose 3%, lead rose 1.5% but nickel fell 1.3%.

The gold futures price rose by US$12.20 or 0.6% to US$1,962.10 an ounce. Spot gold was trading near US$1,950 an ounce at the US close. Over the week, gold rose by US$14.20 or 0.7%. Iron ore rose by US$3.15 or 2.6% to US$125.20 a tonne. For the week, iron ore fell by US$3.85 or 3%.

G’day Australia

In Australia, no major economic data is released. In China, the loan prime rate decision is announced. In the US, the Chicago Federal Reserve National Activity index is issued.

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