Global Fundamental Analysis 01/03/2021

Global Fundamental Analysis 01/03/2021, FP Markets

Opening Call: The Australian share market is to open higher.

Stocks close mixed and ended the week lower. The 10-year Treasury note yield fell 5.4 basis points to 1.42%, but ended 11.5 basis points up this week and 36.9 basis points higher for February. The WSJ Dollar Index was up 0.78% to 85.93. Oil ended sharply lower ahead of an OPEC meeting. Gold prices booked their lowest close since June and steepest monthly drop in four years.

Australian Market

Australia’s S&P/ASX 200 index closed 2.4% lower after a broad-based selloff that pushed the benchmark to its worst day since early September. The ASX 200 lost 1.8% for the week.

US Market

U.S. stocks ended a down week with mixed results as investors tried to digest the implications of a rapid rise in bond yields.

The Dow Jones Industrial Average fell 1.5% and the S&P 500 fell 0.5%. The Nasdaq Composite, despite gaining 0.6%, lost 4.7% for the week, its sharpest weekly drop since October.

Commodities

Gold futures fell for a fourth-straight session to suffer the biggest monthly loss in more than four years, as a dramatic rise in government bond yields undercut demand for the precious metal, pulling prices down to their lowest finish since June.  

Gold for April delivery on Comex was off $46.60, or 2.6%, to settle at $1,730.90 an ounce, the lowest finish since June 2020, according to Dow Jones Market Data.

Oil Futures

U.S. benchmark oil prices tumbled at the end of the session to close 3.2% lower at $61.50 a barrel. The decline was the biggest one-day fall since Nov. 6 and put a definitive end to four straight sessions of increases.

West Texas Intermediate crude for April delivery still ended with a 3.8% weekly gain, and analysts say market sentiment remains generally bullish, but looking ahead investors are starting to worry that prices have risen so fast — nearly 30% since the start of the year to a 21-month-high on Thursday — that more selling and price declines may be on the horizon.

Forex

Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.2160 to lows near US$1.2060 and was near US$1.2075 at the US close. The Aussie dollar fell from highs near US78.45 cents to lows near US76.95 cents and was near US77.05 cents at the US close. And the Japanese yen eased from 106.00 yen per US dollar to JPY106.70
yen and was near JPY106.60 at the US close.

European Markets

European sharemarkets fell on Friday as investors booked profits. Resource stocks fell by 4.2% and technology lost 1.4%. The pan-European STOXX 600 index lost 1.6% on Friday and fell for the first time in four weeks, losing 2.4%. The German Dax index fell by 0.7% and the UK FTSE index lost 2.5%. In London trade shares in Rio Tinto fell by 4.5% while shares in BHP lost 3.4%.

Asian Markets

The Nikkei Stock Average extended early losses to end 4.0% lower amid weaker investor sentiment due to a rout in global bond markets.  

China’s major stock benchmarks were lower. Chinese stocks weakened in morning trade to further withdraw from a strong rally earlier this month. The benchmark Shanghai Composite Index lost 2.12%, reversing a brief recovery on Thursday to resume its recent downturn.

The Shenzhen Composite Index shed 1.79% and the ChiNext Price Index was down 2.12%.

  • Global Fundamental Analysis 01/03/2021, FP Markets
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