Global Fundamental Analysis 04/03/2021

Global Fundamental Analysis 04/03/2021, FP Markets

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

U.S. stocks fell, led by a slide in tech stocks. The yield on the 10-year Treasury rose to 1.47% as the bond-market selloff gained pace. The WSJ Dollar Index rose to 85.9. Oil prices rose amid reports OPEC+ may not boost production. Gold prices were dinged by the rise in Treasury yields and a climbing dollar.

Australian Market

Australia’s S&P/ASX 200 closed 0.8% higher as GDP data showed that the country’s economy had roared back to life in the fourth quarter. The materials sector was the session’s standout performer, rising 3.1%.

US Market

U.S. stocks fell with technology stocks dropping sharply and government bond yields ticking higher.  

The S&P 500 fell 1.3%. The Nasdaq Composite fell 2.7%, the second consecutive decline for the tech-heavy index. The Dow Jones Industrial Average held up better, edging down 0.4%. 

Stocks have been jittery in recent days, with the major indexes wavering between losses and gains. Some money managers have grown concerned that stimulus measures will lead to a spike in inflation and erode the value of bond returns. Worries about inflation have also triggered bets that the Federal Reserve may start to boost interest rates in the next two years.

Commodities

Gold futures fell to end the session at their lowest in nearly nine months, as U.S. Treasury yields resumed their rise and the dollar firmed, pressuring prices for the precious metal.  

The move comes a day after gold posted its first gain in six sessions. Gold for April delivery on Comex lost 1% to settle at $1,715.80 an ounce after touching an intraday low at $1,699.40.

The settlement was the lowest for a most-active contract since June 8, FactSet data show.

Oil Futures

Oil futures rose, finding support following a report that the Organization of the Petroleum Exporting Countries and its allies were considering rolling over production cuts into April instead of easing them.  

Prices continued to climb after the Energy Information Administration reported a hefty increase of more than 21 million barrels in last week’s U.S. crude inventories, along with significant declines in petroleum-product inventories.  

West Texas Intermediate crude for April delivery rose 2.6% to settle at $61.28 a barrel on the New York Mercantile Exchange. May Brent crude, the global benchmark, rose 2.2% at $64.07 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$1.2110 to lows near US$1.2045 and was near US$1.2065 at the US close. The Aussie dollar fell from highs near US78.35 cents to lows near US77.75 cents and was near US77.85 cents at the US close. And the Japanese yen eased from 106.78 yen per US dollar to JPY107.13 yen and was near JPY106.95 at the US close.

European Markets

European sharemarkets rose on Wednesday. Autos and travel stocks led the way. But defensive sectors fell, including utilities and healthcare. The pan-European STOXX 600 index gained 0.1%. The German Dax index lifted 0.3% and UK FTSE index climbed 0.9%. In London trade shares in Rio Tinto were flat while shares in BHP fell 0.1%.

Asian Markets

Earlier Wednesday, Chinese stocks ended the session higher, recovering from early losses. The benchmark Shanghai Composite Index gained 1.9%, while the Shenzhen Composite Index added 1.3%. The ChiNext Price Index rose 1.0%. Steelmakers led the upturn, buoyed by expectations of production control measures in the coming months, which would limit supply and boost steel prices.  

Hong Kong’s Hang Seng Index rose 2.7% amid expectations of a quicker economic recovery supported by global vaccine rollouts. Casino operators were leading the gains, following news that people entering Macau’s casinos will no longer need to show a negative Covid-19 test result.  

The Nikkei Stock Average also settled higher, led by gains in auto and steel stocks, as the government mulls whether or not to lift the Covid-19 state of emergency for Tokyo.

  • Global Fundamental Analysis 04/03/2021, FP Markets
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