Global Fundamental Analysis 17/06/2021

Global Fundamental Analysis 17/06/2021, FP Markets

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

U.S. stocks closed lower on softer retail sales data. The 10-year Treasury yield was down slightly at 1.498%. The WSJ Dollar Index rose 0.06% to 85.61. U.S. oil prices rose to more than two-year highs on demand optimism, as traders watch Iran talks. Gold prices settled at their lowest levels in a month. 

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Australian Market

Australia’s S&P/ASX 200 index closed 0.9% higher at a record amid strength from financial, retail and tech stocks. The benchmark index emerged from a three-day holiday weekend to build on a late momentum from U.S. stocks. Commentary by Australia’s central bank midway through the session was viewed by economists as hinting at further stimulus.

US Market

U.S. stocks fell after fresh data showed Americans slowed their spending last month. The Dow Jones Industrial Average dropped 0.3%, while the S&P 500 lost 0.2% and the Nasdaq Composite slid 0.7%. The latter two set record closes on Monday. Recent data from the Commerce Department showed that retail spending fell 1.3% in May. Supply-chain disruptions and business reopenings are triggering a consumer spending shift from goods to services.

Commodities

Gold prices fell, extending their decline to the lowest prices in a month, ahead of a policy update from the Federal Reserve due Wednesday, which could set the tone for financial markets over the next few months.  

Gold for August delivery fell 0.5% to settle at $1,856.40 an ounce following a 0.7% decline on Monday. Prices for the most active contract marked another finish at the lowest since May 14, FactSet data show. Gold prices are down by about 2% so far in 2021 and have struggled to sustain altitude above $1,900 in recent trade.

Oil Futures

Oil futures rose, with prices settling at more than two-year highs, on continued optimism about recovering demand and doubts that the U.S. would rejoin the Iran nuclear deal ahead of that country’s presidential election at the end of the week.  

West Texas Intermediate crude for July delivery rose nearly 1.8% to settle at $72.12 a barrel on the New York Mercantile Exchange. That’s the highest front-month contract finish since Oct. 10, 2018, according to Dow Jones Market Data. August Brent crude, the global benchmark, gained almost 1.6% to finish at $73.99 a barrel on ICE Futures Europe, notching the highest settlement since April 2019.

Forex

Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.2135 to lows near US$1.2000 and was near session lows at the US close. The Aussie dollar fell from highs near US77.15 cents to lows near US76.10 cents and was the lows at the US close. And the Japanese yen eased from near 109.80 yen per US dollar to JPY110.69 and was near the weakest levels at the US close.

European Markets

European sharemarkets were mixed on Wednesday. The pan-European STOXX 600 index rose by 0.2% to record highs. The German Dax fell by 0.1%, dragged lower by a 1.2% fall in software giant SAP. But the UK FTSE index lifted by 0.2%. In the London trade, shares in Rio Tinto rose 0.1% while BHP lost 0.1%.

Asian Markets

Japan’s Nikkei Stock Average closed 1.0% higher, supported by consumer and pharmaceutical stocks.  

Chinese stocks ended lower, extending Friday’s broad declines after a three-day break, dragged by financial and mining shares even as automakers gained.

The Shanghai Composite Index fell 0.9%, the Shenzhen Composite Index dropped 0.8%, and the ChiNext Price Index closed 1.1% lower.

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