Global Fundamental Analysis 02/06/2021

Global Fundamental Analysis 02/06/2021, FP Markets

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

U.S. stocks wavered after manufacturing data. The 10-year Treasury yield edged up to 1.612%, from 1.592% Friday. The WSJ Dollar Index rose 0.04% to 85.13. U.S. oil prices settled at their highest in more than two years as OPEC+ kept its output plan in place. Gold prices ended with a modest loss, holding above the $1,900 mark. 

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Australian Market

Australia’s S&P/ASX 200 index ended down 0.3%, failing at the last stretch after having recovered from early losses. Financial stocks were the biggest losers as banks and insurers lost ground, while the health sector also fell. The materials sector rose 0.3% while energy added 1.3% amid stronger commodity prices.

US Market

U.S. stocks wavered as fresh data showed that U.S. manufacturing activity while expanding, continues to be affected by rising commodities prices, materials shortages and difficulties in the labour market.  

The S&P 500 finished down 0.1%, following a fourth consecutive monthly advance for the broad index. The technology-focused Nasdaq Composite also retreated 0.1%.

The Dow Jones Industrial Average rose about 0.2%. All three major indexes were trading off from larger gains notched earlier in the session.  

The Nikkei Stock Average closed 0.2% lower, as declines in steel and pharmaceutical stocks offset gains in auto and energy shares.

Commodities

Gold futures ended lower, but held ground above the key $1,900 mark, as U.S. Treasury yields edged up following upbeat U.S. manufacturing data.  

Gold for August delivery inched down by 0.02% to settle at $1,905 an ounce on Comex. Prices for the yellow metal scored a gain of nearly 8% in May.

Oil Futures

Crude oil futures rallied, with U.S. and global benchmark prices marking their highest settlements in more than two years, after the Organization of the Petroleum Exporting Countries and their allies kept their current plan to gradually increase oil production through July in place.  

West Texas Intermediate crude for July delivery climbed 2.1% to settle at $67.72 a barrel on the New York Mercantile Exchange. Based on the front-month contracts, prices saw their highest settlement since Oct. 22, 2018, according to Dow Jones Market Data.  

The August Brent contract rose 1.3% to $70.25 a barrel on ICE Futures Europe, paring some of the earlier gains that lifted prices to as high as $71.34. Prices logged the highest front-month finish since May 2019.

Forex

Major currencies were mixed against the US dollar in European and US trade. The Euro held between US$1.2215 and US$1.2255 and was near US$1.2220 at the US close. The Aussie dollar held
between US77.30 cents and US77.70 cents and was near US77.55 cents at the US close. And the Japanese yen held between 109.30 yen per US dollar and JPY109.70 and was near JPY109.45 at the
US close

European Markets

European sharemarkets advanced on Tuesday with higher metal and oil prices lifting commodity companies. The IHS Markit final reading of eurozone factory activity rose to 63.1 in May, above an initial 62.8 “flash” estimate and the highest since the survey began in June 1997. Eurozone consumer prices rose from 1.6% to 2.0% in May – the fastest pace since 2018. The pan-European STOXX 600 index climbed 0.8% to record highs. The German Dax index gained 1.0%. And the UK FTSE index was up by 0.8%. In London trade shares in Rio Tinto rose by 4.0% and shares in BHP rose by 3.6%.

Asian Markets

Chinese stock markets finished the session mixed after strong gains on Monday. The benchmark Shanghai Composite Index rose 0.3%, its highest closing level since February.

The Shenzhen Composite Index gained 0.4%, while the ChiNext Price Index fell 0.3%. Oil firms led gains, as Brent crude broke above the psychologically important $70 per barrel level amid expectations of strong summer demand in the U.S. The upward momentum was dragged by weakness in renewable energy stocks, as the sector withdrew after its gains on Monday.

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  • Global Fundamental Analysis 02/06/2021, FP Markets
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