Crude on the rise as gold slips
Crude oil prices extended their strong start to the week overnight with investors taking stock of disciplined supply cuts and an increase in demand as the global economy returns from its COVID-19 slump.
Brent crude rose 3 per cent to $US36.20 a barrel while West Texas Intermediate added 3 per cent to close at $US34.26 a barrel.
“Russia expects OPEC+ to take a ‘wait and see’ approach before considering further production cuts. The comments come as oil markets continue to show encouraging signs of a faster than expected rebalancing,” said NAB head of commodity research Lachlan Shaw.
“China’s peak hour road congestion in cities above 10 million inhabitants is up to 45% higher than levels a year ago, according to GPS tracking data, as post COVID-19 recovery continues and commuters shun public transport in favour of driving to work.”
Gold prices were hit hard overnight as investors reduced their holding in the safe haven asset, with optimism increasing over how quickly the economy will recover from COVID-19. The precious metal slid 1.4 per cent to $US1,710 an ounce.
AngloGold confirms COVID-19 outbreak at South African mine
AngloGold Ashanti has confirmed 196 workers from its Mponeng mine in South Africa have tested positive to COVID-19, 30 per cent of the 651 of the tests completed.
The company said the “vast majority” of cases were asymptomatic while the remainder had very mild symptoms.
“All positive cases continue to be isolated in line with national health protocols, with on-site isolation facilities available for those who may need them,” AngloGold said in a statement.
“Operations at Mponeng Mine continue to be voluntarily suspended to enable contact tracing, further engagement with all relevant stakeholders, and deep cleaning and sanitisation of workplaces and key infrastructure.”
Surface operations restarted at the mine complex in mid-April after the company stopped all operations from March 26 when the South African government introduced a 21-day nationwide lockdown.
Earlier this month AngloGold also said workers at its Obuasi redevelopment project in Ghana had tested positive, although operations continue at the site. AngloGold said those that tested positive were required to self-isolate for four weeks.
Australian dollar surges as risk tolerance rises
The Australian dollar rose near 2 per cent at one point overnight, narrowing its year-to-date loss to its US counterpart, amid rising optimism about the economic outlook.
That optimism is being driven by the slow and steady easing of lockdown measures, particularly in the US. Apple overnight said it’s preparing to reopen 100 of its US stores.
The Aussie leapt as high as US66.75¢, before paring its gain. It was trading at US66.46¢ near 8am AEST.
The year-to-date loss against the US dollar now stands at 6 per cent.
The local currency has now risen more than 15 per cent from its March lows below US57.50¢.
Among the reasons for the overnight retreat in the US dollar was a Conference Board report that showed US consumer confidence edged higher this month after collapsing in April.
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Dow rises 530 points, ASX futures point down
Australian shares are poised to open lower. The currency surged as much as 1.9%. The S&P 500 broke through the 3000-point mark before easing. The Dow leapt more than 500 points, paced by financials and industrials.
US stocks closer higher, though off their session highs, as optimism about a potential coronavirus vaccine and a revival in business activity as more states eased lockdown measures.
Jamie Dimon said he sees “pretty good odds” of a fast economic rebound starting in the third quarter because of the US government’s stimulus programs and the strength of the consumer going into the pandemic.
“You could see a fairly rapid recovery,” the JPMorgan Chase chief executive officer said at a virtual conference hosted by Deutsche Bank. “The [US] government has been pretty responsive, large companies have the wherewithal, hopefully we’re keeping the small ones alive.”
Goldman Sachs surged 9% and JPMorgan was 7.1% higher as 24 of the Dow Jones’ 30 components advanced. Raytheon Technologies, Dow Inc and Walgreens were also major movers.
Read the full story here.
Overnight market highlights
- ASX futures down 63 points or 1.1% to 5744 near 7.30am AEST
- AUD +1.7% to 66.56 US cents (Overnight peak 66.75)
- On Wall St: Dow +2.2% S&P 500 +1.2% Nasdaq +0.2%
- In New York: BHP +1% Rio -1.3% Atlassian -5.2%
- In Europe: Stoxx 50 +0.9% FTSE +1.2% CAC +1.5% DAX +1%
- Spot gold -1.1% to $US1713.25 an ounce at 2.40pm New York time
- Brent crude +2% to $US36.25 a barrel
- US oil +3.5% to $US34.42 a barrel
- Iron ore -2.4% to $US95.28 a tonne
- Dalian iron ore -2.7% to 687.5 yuan
- LME aluminium +0.9% to $US1520 a tonne
- LME copper +1.4% to $US5361.50 a tonne
- 2-year yield: US 0.17% Australia 0.25%
- 5-year yield: US 0.35% Australia 0.38%
- 10-year yield: US 0.70% Australia 0.88% Germany -0.43%
- US prices near 5pm New York time
Good morning and welcome to Markets Live for Wednesday.
This blog is not intended for investment advice.