Australia poised for recession: ASX set to open higher

Market Reports

by Rachael Jones


Following a broad rally from US markets overnight, the Australian share market looks set to open higher this morning. If the GDP cpntnues to fall in the next quarter Australia will enter its first technical recession in 29 years. A recession is when we see two consecutive quarters of GDP contraction, which are now certain to occur due to the impact of coronavirus-related shutdowns in June quarter. Global stocks extended their rally into an eighth straight day due to optimism for a quick economic recovery from the pandemic. European stocks jumped the most in two weeks. The Australian dollar continues to rise against the USD.

Local economic news

International Trade in Goods and Services for April 2020 and also figures for retail sales for April.

Markets

Wall Street closed higher yesterday: The Dow Jones Industrial Average closed 2.1 per cent higher at 26,270, the S&P 500 added 1.4 per cent to 3123 and the NASDAQ gained 0.8 per cent to 9683.

European markets higher, London’s FTSE gained 2.6 per cent, Paris added 3.4 per cent and Frankfurt closed 3.9 per cent higher.

Asian markets closed higher, Tokyo’s Nikkei gained 1.3 per cent, Hong Kong’s Hang Seng added 1.4 per cent, and China’s Shanghai Composite closed 0.07 per cent higher.

Taking all of this into equation, the SPI futures are pointing to a 1.2 per cent gain.

Yesterday, the Australian share market closed 1.83 per cent higher at 5942.

Company news 

AFT Pharmaceuticals (ASX:AFP) has signed an exclusive distribution agreement with Austria’s Ever Valinject for the commercialisation of Maxigesic IV®, the intravenous form of its patented analgesic, in a significant portion of Western Europe: Germany, Austria, Italy and France. It also announces steady market share gains and sales growth across a broad range of its Australasian over-the-counter medicines as consumers seek protection against Covid-19 infection. Shares AFT Pharmaceuticals (ASX.AFP) last traded at $4.60 on the 2nd of June.

Currencies

One Australian Dollar at 7:40 AM was buying 69.21 US cents, 55.06 Pence Sterling, 75.38 Yen and 61.61 Euro cents.

Commodities

Iron Ore lost 0.1 per cent to US$101.22.
Iron Ore futures suggest a 0.1 per cent fall.
Gold has lost $30.90 to US$1703 an ounce.
Silver has fallen $0.30 to US$17.95 an ounce.
Oil was down $0.06 to US$36.75 a barrel.

Rachael Jones

Finance News Network
Rachael comes to FNN after working for Fairfax Media covering international breaking news, including the global economy and politics. She joined FNN in February 2018. She has reported on Australia’s finance news for various organisations since 2000 and has also interviewed a number of key business players, including Bill Gates. Rachael has also worked across a number of countries, including the UK and the US.