5 December 2020
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Good morning, Australia

Craig James
26 October 2020

How’dy USA

In US economic data, the 'flash' IHS-Markit manufacturing index rose from 53.2 to 53.3 in October (survey: 53.4). The services index rose from 54.6 to 56.0 in October (survey: 54.6).

US share markets closed mixed on Friday in choppy trade as investors continued to monitor developments in talks over a stimulus package. Shares in Intel lost 10% after reporting a drop in margins. And shares in American Express fell 3.6% after third-quarter profit missed estimates. The Dow Jones index fell by 28 points or 0.1%. But the S&P500 index gained 0.3% and the Nasdaq index was up by 42 points or 0.4%. Over the week, the Dow Jones fell 0.9%; the S&P 500 lost 0.5%; and the Nasdaq lost 1.1%.

US longer-term treasury yields fell on Friday. Investors squared positions after a week of sharply higher yields. Investors are focussed on more stimulus being applied to the economy - before or after the election. US 2-year yields were flat near 0.155%. And US 10-year yields fell 1 point from 4-month highs to 0.841%. For the week, US 2-year yields rose 1 point and US 10-year yields rose by 10 points.

Bonjour Europe

European share markets rose on Friday. Shares in Barclays rose 7% after reporting its quarterly earnings result. Banks rose 2.8%. Shares in Airbus rose 5.6% after it told suppliers to be ready for a lift in output once travel demand recovers. The pan-European STOXX 600 rose by 0.6%, the German Dax index lifted 0.8% and the UK FTSE index rose by 1.3%. In London trade, shares of Rio Tinto rose by 0.7% and shares in BHP rose by 0.3%.

Hello World!

Major currencies were mixed against the US dollar in European and US trade. The Euro rose from lows near US$1.1790 to highs near US$1.1865 and was near US$1.1860 at the US close. The Aussie dollar held between lows near US71 cents and highs near US71.55 cents and was near US71.35 cents at the US close. And the Japanese yen held between 104.55 yen per US dollar and JPY104.87 and was at JPY104.69 at the US close.

Global oil prices fell on Friday. Libya's National Oil Corp said it lifted force majeure on exports from key ports and output would reach 1 million barrels per day in four weeks. At the same time there are demand concerns given that global Covid cases are rising. The number of oil rigs operating in the US rose by 5 last week. Brent crude fell by US69 cents or 1.6% to US$41.77 a barrel. The US Nymex fell by US79 cents or 1.9% to US$39.85 a barrel. Over the week, Brent fell by 2.7% and Nymex lost 2.5%.

Base metal prices were lower by up to 1.5% on Friday on the London Metal Exchange with lead down the most, although aluminium lost just 0.2%. For the week, metals rose by up to 5.4% with nickel up the most. But aluminium fell 1.5%.

The gold futures price rose by US60 cents or less than 0.1% to US$1,905.20 an ounce. Spot gold was trading near US$1,901 an ounce at the US close. Over the week, gold fell by US$1.20 an ounce or 0.1%. Iron ore fell by US$4.20 or 3.5% to US$115.55 a tonne. For the week, iron ore fell by US$3.50 or 2.9%.

G’day Australia

In Australia, the CommSec State of the States report is issued with preliminary international goods trade data. In the US, the Chicago Federal Reserve national activity and Dallas Federal Reserve manufacturing indexes are due with new home sales data.

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