21 October 2020
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Good morning, Australia

Craig James
28 September 2020

How’dy USA

In US economic data, durable goods orders rose by 0.4% in August (survey: 1.5%) after jumping 11.7% in July.

US share markets rose on Friday on signs that US lawmakers were making progress on a reported US$2.4 trillion stimulus package that could be voted on next week. Shares of Apple (+3.8%) and Amazon (+2.5%) both lifted. Boeing shares surged 6.8% on reports the US aviation regulator plans to test-fly the grounded 737 Max plane. Cruise operators Carnival (+9.7%) and Royal Caribbean (+7.7%) jumped after a Barclays upgrade. But Costco Wholesale shares dropped 1.3% on rising COVID-19 costs. The Dow Jones index rose by 358 points or 1.3%. The S&P500 index was 1.6% higher and the Nasdaq index rose by 241 points or 2.3%. Over the week, the Dow fell 1.7%; the S&P 500 lost 0.6%; but the Nasdaq rose 1.1%.

US longer-dated treasury bond prices edged higher on Friday (yields lower). US 10-year yields fell by 1 point to near 0.656%. But US 2-year yields were steady near 0.13%. For the week, US 2-year yields were down 1 point and US 10-year yields fell 4 points.

Bonjour Europe

European share markets mostly fell on Friday. The pan-European STOXX 600 index lost 0.1% to be down 3.6% over the week - its worst since mid-June. European banks (-1.2%) sank to all-time lows due to the FinCEN dirty money scandal. Auto stocks slid 1.4% as British car production slumped by an annual 45% in August. The German Dax index lost 1.1%. But the UK FTSE index lifted 0.3% with shares of British betting firm William Hill up 43.5% after receiving takeover offers. In London trade, shares of Rio Tinto (-1.7%) and BHP (-0.6%) fell.

Hello World!

Major currencies were lower against the US dollar in European and US trade. The Euro fell from highs near US$1.1683 to lows near US$1.1612 and was near US$1.1630 at the US close. The Aussie dollar fell from highs near US70.85 cents to lows near US70.06 cents and was near US70.27 cents at the US close. And the Japanese yen eased from 105.23 yen per US dollar to JPY105.69 and was near JPY105.60 at the US close.

Global oil prices edged lower on Friday on concerns that virus lockdown measures will stifle crude demand. Oil traders also fretted about rising supply due to an increase in Iraqi exports and lifting Libyan output. Brent crude fell by US2 cents or 0.05% to US$41.92 a barrel. The US Nymex lost US6 cents or 0.1% to US$40.25 a barrel. Over the week, Brent dropped by US$1.23 or 2.9% and the Nymex lost US86 cents or 2.1%.

Base metal prices were mixed on Friday with aluminium (+0.6%) up most, copper steady (+0.2%) and lead down most (-1.2%). For the week, metal prices fell due to the stronger US dollar and concerns that rising COVID-19 cases will hurt demand. Zinc (-6.5%) fell most, followed by tin (-5.1%) and copper (-4.5%). The gold futures price fell by US$10.60 or 0.6% to US$1,866.30 an ounce. Spot gold was trading near US$1,860 an ounce at the US close. Over the week, gold fell by US$95.80 or 4.9% - the largest loss since mid-March. Iron ore rose by US15 cents or 0.1% to US$116.05 a tonne. For the week, iron ore fell by US$9.15 a tonne or 7.3% - the biggest fall since February.

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