Global Fundamental Analysis 02/09/2021

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


U.S. stocks wavered, with Nasdaq hitting another new high. The 10-year Treasury note yield was at 1.301%, compared with 1.303% on Tuesday. The WSJ Dollar Index fell 0.13% to 87.20. U.S. oil prices pared losses as OPEC+ kept a plan to boost output in place. Gold futures ended lower as investors await U.S. jobs data for directional cues.


Australian Market

Australia’s S&P/ASX 200 index closed 0.1% lower, paring losses after data showed economic growth had slowed less than expected in the June quarter. The benchmark had been almost 1.0% lower in early trade and was still 0.8% lower before data showed the economy grew 0.7% in the second quarter, compared with 1.9% in the first quarter and economists’ expectations for a 0.4% expansion. Energy, telecoms and financials were the strongest performing sectors, offsetting losses elsewhere.


US Market

The Nasdaq rose to a record to start the month, while other U.S. stock benchmarks were mixed. The S&P 500 pared early gains to trade less than 0.1% higher. The benchmark stock index has climbed for seven consecutive months and closed Tuesday slightly below its all-time high. The tech-heavy Nasdaq Composite Index added 0.3% to a new closing high. The Dow Jones Industrial Average slipped around 0.1%.

Fresh data released showed that economic activity in the manufacturing sector grew in August. An index of U.S.-based manufacturing rose to 59.9 in August from 59.5 in the prior month, according to the Institute for Supply Management.



Gold futures ended lower, with a weaker-than-expected U.S. private-sector jobs data only providing a temporary boost to prices for the haven metal, as investors expected the jobs report due on Friday to provide more definitive direction guidance for gold. December gold lost 0.1% to settle at $1,816 an ounce, following a 0.3% gain on Tuesday. The precious metal put in a monthly advance of less than $1.


Oil Futures

Oil futures declined, but traded off the session’s lows, with prices finding support after major oil producers decided to make no changes to their plan to gradually increase crude production. West Texas Intermediate crude for October delivery fell 0.5% at $68.13 a barrel, after the contract for U.S. benchmark oil fell 1% on Tuesday on the New York Mercantile Exchange.

Meanwhile, global benchmark November Brent crude fell 0.6% at $71.20 a barrel, following a 0.6% decline in the session before, which contributed to its monthly loss of 4.4%. The Organization of the Petroleum Exporting Countries and its allies, a group collectively known as OPEC+, announced that it would stick to the plan it reached in July to increase oil production by 400,000 barrels a day each month from August.



Major currencies were stronger against the US dollar in European and US trade. The Euro rose from lows near US$1.1793 to highs near US$1.1855 and was near US$1.1840 at the US close. The Aussie dollar lifted from lows near US73.23 cents to highs near US73.83 cents and was near US73.65 cents at the US close. And the Japanese yen firmed from near 110.40 yen per US dollar to JPY109.87 and was near JPY110.00 at the US close.


European Markets

European sharemarkets closed mostly higher on Wednesday. The pan-European STOXX 600 index rose by 0.5% with retail shares up by 1.8%. The Eurozone unemployment rate fell from 7.8% in June to 7.6% in July (survey: 7.6%). The German Dax index lost 0.1%, but the UK FTSE index gained 0.4%. In London trade shares in Rio Tinto (-0.9%) and BHP (-1.2%) both declined.


Asian Markets

Japan’s Nikkei Stock Average closed 1.3% higher, helped by gains in financial and insurance stocks. Financial shares were among the best performers. Chinese stocks ended the session mixed, continuing Tuesday’s muted trade. The benchmark Shanghai Composite Index rose 0.7%, continuing to rise for the fourth-straight trading day.

But the Shenzhen Composite Index and the ChiNext Price Index both continued to fall, dropping 0.5% and 0.8%, respectively. The mining sector retreated from recent gains, as China begins the bidding process for the latest release of metal reserves. The losses were offset by a recovery in consumer stocks such as food-and-beverage firms, after the sector’s muted performance in recent sessions.

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