Global Fundamental Analysis 16/04/2021

Global Fundamental Analysis 16/04/2021, FP Markets

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

U.S stocks rose amid solid earnings results and strong U.S. economic data. The yield on the 10-year Treasury fell to 1.56% amid renewed demand for government debt. The WSJ Dollar Index traded in a narrow band, slipping to 86.45. Oil prices extended their climb after upbeat monthly oil demand forecasts and a weekly decline in U.S. crude inventories.

Gold futures scored their biggest daily gain since March as benchmark U.S. bond yields pulled back.

Australian Market

Australia’s S&P/ASX 200 gained 0.5%, hitting a fresh 14-month high. Commodity, financial and consumer stocks helped the benchmark recover from an opening 0.5% dip, gaining steadily through the release of data showing the unemployment rate fell to 5.6% in March, from 5.8% in February.

US Market

U.S. stock indexes hit fresh records, with the Dow Jones Industrial Average closing above 34,000 for the first time.  

Strong earnings reports and improving economic data pushed the Dow Industrials up 0.9%.

The S&P 500 gained 1.1%, with both indexes setting record closing highs.  

The technology-heavy Nasdaq Composite advanced 1.3% as shares of big tech stocks rallied.  

A powerful rally has pushed stocks to repeated highs in 2021, and many investors believe the rollout of Covid-19 vaccines and plentiful government spending suggest shares have room to keep rising. The S&P 500 and Dow are both up about 11% for the year.

Commodities

Gold futures scored their biggest daily gain since March, with prices settling at their highest in seven weeks, as benchmark U.S. bond yields pulled back and rising U.S. tensions with China and Russia boosted the metal’s haven appeal.  

Gold also moved up after a series of good reports on the health of the U.S. economy, which provided some support for bullion given the threat of inflation.  

June gold futures rose 1.8% to settle at $1,766.80 an ounce. That was the highest settlement for a most active contract since Feb. 25 and the largest one-day dollar and percentage increase on March 9, FactSet data show.

Oil Futures

Oil futures scored the fourth climb in a row, with prices extending their rise to the highest finish since mid-March after upbeat monthly oil demand forecasts and a weekly decline in U.S. crude inventories.  

“Demand optimism continues to be a key component…with recent data out of the U.S. showing highway traffic exceeding pre-Covid levels,” said Robbie Fraser, manager, global research & analytics at Schneider Electric.  

Traders also kept an eye on ongoing talks on a nuclear deal between Iran and world powers. “A recent attack on Iran’s nuclear-linked infrastructure is set to complicate any further talks around a U.S. return to the Iranian nuclear deal,” Mr Fraser said in a daily market update.  

West Texas Intermediate crude for May delivery added 0.5% to settle at $63.46 a barrel on the New York Mercantile Exchange.  

Global benchmark June Brent crude also picked up 0.5% to settle at $66.94 a barrel on ICE Futures Europe.  

Front-month contract prices for WTI and Brent crude have now climbed for four sessions in a row.

Forex

Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.1991 to lows near US$1.1956 and was near US$1.1965 at the US close. The Aussie
dollar rose from lows near US77.12 cents to highs near US77.60 cents and was near US77.55 cents at the US close. And the Japanese yen rose from 108.95 yen per US dollar to JPY108.62 and was near JPY108.70 at the US close.

European Markets

European sharemarkets climbed on Thursday with the pan-European STOXX 600 index up by 0.5% after hitting an all-time high in the session. Mining stocks climbed 1.5%. The German Dax index rose by 0.3%. The UK FTSE 100 index rose 0.6% to its highest level since February 2020 as a surge in metals prices lifted shares of companies such as Rio Tinto (+2.3%) and BHP (+1.5%).

Asian Markets

Earlier Thursday, Chinese stocks settled lower, weakening again after a brief recovery on Wednesday. The benchmark Shanghai Composite Index lost 0.5%.

The Shenzhen Composite Index fell 0.5%, while the ChiNext Price Index also shed 0.5%. Food-and-beverage companies and industrial groups, including steelmakers and building-material suppliers, led the losses after having spearheaded the rebound during the past session.  

Hong Kong shares also fell. The benchmark Hang Seng Index shed 0.4% as Macau casino operators led losses.  

Japanese stocks, however, ended the session higher as gains in energy and financial stocks helped offset losses in electronics stocks. The Nikkei Stock Average edged 0.1% higher ahead of Japanese Prime Minister Yoshihide Suga’s trip this week to the U.S.

  • Global Fundamental Analysis 16/04/2021, FP Markets
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