Global Fundamental Analysis 30/03/2021

Global Fundamental Analysis 30/03/2021, FP Markets

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

 U.S. stocks were mixed amid concerns over potential losses at banks. The yield on the 10-year Treasury rose to 1.72% as U.S. vaccination rates accelerate. The WSJ Dollar Index rose to 87.47. Oil prices rose as traders expect shipping bottlenecks to persist. Gold prices fell under the pressure of a stronger dollar and higher Treasury yields.

Australian Market

Australia’s S&P/ASX 200 closed 0.4% lower after giving away opening gains amid the announcement of a fresh Covid lockdown and a slide in U.S. equity futures. The benchmark opened higher after the DJIA and S&P 500 closed last week at records but was in negative territory by late morning and never recovered. Tech stocks led to declines.

US Market

U.S. stocks wobbled, pressured by declines in shares of banks and energy producers. The Dow Jones Industrial Average rose 0.3% as of the 4 p.m. close of trading in New York. The S&P 500 slipped 0.1%, and the Nasdaq Composite fell 0.6%.  

Financial stocks led to declines after a large investment fund last week unwound billions of dollars in holdings, triggering concern that global banks that dealt with the firm could face sharp losses.

Credit Suisse and Nomura Holdings said that they could incur substantial losses from dealings with a U.S. client. Neither bank named its respective client, but people familiar with the matter have identified the fund as former Tiger Asia manager Bill Hwang’s Archegos Capital Management, which sold $30 billion in holdings last week.

Commodities

Gold futures posted their lowest settlement in three weeks, pressured by strength in the U.S. dollar and Treasury yields.  

Gold for April delivery lost 1.2% to settle at $1,712.20 an ounce, following a 0.5% weekly slump.

Oil Futures

Oil futures ended higher with traders expecting shipping delays to persist, even as one of the world’s largest container vessels has been freed in the Suez Canal.  

While the development in the Suez Canal is promising for the return of oil shipments through the water conduit, “due to the large number of vessels that have accumulated, it could still be days or weeks until the canal is fully back to normal operations,” said Louise Dickson, oil markets analyst at Rystad Energy.  

Against that backdrop, West Texas Intermediate crude for May delivery rose 1% to settle at $61.56 a barrel on the New York Mercantile Exchange. That was the highest front-month contract finish since March 17, according to Dow Jones Market Data.  

May Brent crude added 0.6% to settle at $64.98 a barrel on ICE Futures Europe.

Forex

Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.1793 to lows near US$1.1759 and was near US$1.1765 at the US close. The Aussie
dollar rose from lows near US76.15 cents to highs near US76.54 cents and was near US76.35 cents at the US close. And the Japanese yen eased from near 109.37 yen per US dollar to JPY109.84 and was near JPY109.80 at the US close.

European Markets

European sharemarkets were mostly higher on Monday. The pan European STOXX 600 index gained 0.2%, hitting 13-month highs. But shares of Credit Suisse plunged 13.8% after a warning of a hit to its first-quarter results due to “significant” losses from exiting positions after US-based hedge fund Archegos defaulted on margin calls. The German Dax index rose by 0.5% to an all-time high. And the UK FTSE index fell just 0.1% with London-listed shares of Rio Tinto (-1.0%) and BHP (-0.6%) both lower.

Asian Markets

Earlier Monday, China’s major stock benchmarks ended little changed in mixed trading amid a lack of positive catalysts. The Shanghai Composite Index closed 0.5% higher and the Shenzhen Composite Index added 0.2%, while the ChiNext Price Index slipped 0.4%.

Mining and food-and-beverage stocks led to gains, while media and IT companies broadly declined.  

Hong Kong’s Hang Seng Index ended flat, as sharp falls in several leading tech stocks offset strong gains among property developers and banks.  

The Nikkei Stock Average rose 0.7% as gains in electronics, e-commerce and auto stocks helped offset losses in financial stocks.

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