Global Fundamental Analysis 26/05/2020

Australian Market

The bill for the Government’s economic rescue package has been cut, dramatically, thanks to a $60 billion miscalculation revealed last week. On Monday Treasurer Josh Frydenberg said it meant the country would be borrowing $60 billion less to cover the coronavirus stimulus.

The market rally for the Aussie market has continued with the ASX 200 lifting another 102 points or 1.8% to 5716 at lunch, following a near 2.2% jump on Monday. Market
action was a little quieter than usual overnight with both the US and UK markets observing public holidays, giving local shares little to go off this morning.

US Market

Memorial Day – Markets closed

Commodities

Spot gold was trading near US$1,729 an ounce in late North American trade. Iron ore was unchanged at US$96.85 a tonne due to the public holiday in Singapore, according to Reuters

Oil Futures

Global oil prices rose on Monday after the International Energy Agency’s executive director Fatih Birol said that oil consumption hadn’t yet peaked and may rebound to pre-virus levels. The Brent crude price rose by US40 cents or 1.1% to US$35.53 a barrel. And the US Nymex price lifted around US47 cents or 1.4% to US$33.72 a barrel. There was no US settlement due to the public holiday

Forex

Major currencies were stronger against the US dollar in European and North American trade. The Euro rose from lows near US$1.0869 to highs near US$1.0913 and was around US$1.0895 in late North American trade. The Aussie dollar rose from US65.20 cents to near US65.48 cents and was around US65.45 cents in late North American trade. And the Japanese yen rose from JPY107.74 per US dollar to near JPY107.65 and was near JPY107.72 in late North American trade

European Markets

European sharemarkets closed higher on Monday. Investors weighed a rebound in German business sentiment and positive corporate updates against prospects for the European Commission’s COVID-19 recovery plan update on Wednesday. The pan-European STOXX 600 index rose by 1.5%. The German Dax index lifted 2.9%. Germany’s rally was led by Bayer (+7.8%) after the company said it had made progress in seeking a settlement over claims its Roundup weedkiller causes cancer.

The French CAC 40 index closed higher by 2.2%, led higher by Airbus (+8.5%), commercial real estate company Unibail-Rodamco-Westfield (+7.8%) and hospitality
group Accor (+6.9%)

Asian Markets