Global Fundamental Analysis 05/11/2021

Global Fundamental Analysis 05/11/2021, FP Markets

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


U.S. stocks ended the day mixed as investors continued to digest the Federal Reserve’s latest policy decision. The yield on the 10-year Treasury note dropped 5.3 basis points to 1.524%, compared with 1.577% on Wednesday. The WSJ Dollar Index rose 0.41% to 88.66. U.S. oil futures fell to their lowest since early October as OPEC+ decided to keep current production increases in place. Gold futures settled higher as Treasury yields slipped after Wednesday’s Fed decision.


Australian Market

Australia’s S&P/ASX 200 index closed 0.5% higher despite a slump in energy stocks. The financials and technology sectors, however, were standouts, rising 1.0% and 1.2%, respectively. The major banks closed between 0.2% and 1.4% higher.


US Market

U.S. stocks were mixed, with investors still digesting the Federal Reserve’s latest update on stimulus spending and interest rates. The S&P 500 rose 0.4% and the tech-focused Nasdaq Composite gained 0.8%, though both ended trading off morning highs. The Dow Jones Industrial Average fell 0.1%. On Wednesday, all three had hit record highs for the fourth day in a row.  

The Fed on Wednesday said it had approved plans to start scaling back its pandemic-driven bond-buying, but markets took the news in stride. The Fed’s plans were telegraphed ahead of time, said Mark Grant, the chief global strategist at B. Riley Securities, and more importantly, Fed officials didn’t talk about hiking interest rates. 

The Nikkei Stock Average ended 0.9% higher, supported by electronics and financial stocks. Fuji Electric and Toshiba each advanced 4.1%, while Hitachi added 1.8%. Among financial stocks, Sumitomo Mitsui Trust rose 2.6%, Mitsubishi UFJ Financial Group advanced 1.1% and Daishi Hokuetsu Financial Group was 1.5% higher.



Gold futures rebounded to post their first gain in three sessions, as Treasury yields declined in the wake of a Federal Reserve decision to taper its bond purchases. December gold rose 1.7% to settle at $1,793.50 an ounce on Comex.


Oil Futures

Oil futures ended a volatile trading session at the lowest prices since early October after the Organization of the Petroleum Exporting Countries and its allies resisted pressure from the Biden administration and decided to keep their crude production increases in place.  

West Texas Intermediate crude for December delivery declined by 2.5% to settle at $78.81 a barrel on the New York Mercantile Exchange. Front-month contract prices marked their lowest finish since Oct. 7, according to Dow Jones Market Data. January Brent crude, the global benchmark, fell 1.8% to settle at $80.54 a barrel on ICE Futures Europe, the lowest since Oct. 1.



Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.1590 to lows near US$1.1525 and was near US$1.1550 at the US close. The Aussie
dollar fell from highs near US74.50 cents to lows near US73.80 cents and was near US74.00 cents at the US close. But the Japanese yen lifted from 114.27 yen per US dollar to JPY113.51 and was near JPY113.75 at the US close.


European Markets

European sharemarkets were firmer on Thursday. Investors were comforted by the US Federal Reserve monetary policy decision. The Bank of England also left official interest rates unchanged. The panEuropean STOXX 600 index rose by 0.4% to record highs. The German Dax index and the UK FTSE index also both rose by 0.4% with the Dax at record highs. Societe Generale rose 1% and Commerzbank advanced 1.5%, after the banks both posted upbeat quarterly earnings. In London trade shares in Rio Tinto fell by 0.6% and BHP shares lifted by 0.8%.


Asian Markets

Chinese stocks finished higher, with gains led by renewable-energy sectors and liquor makers. The Shanghai Composite Index rose 0.8%, the Shenzhen Composite Index gained 1.3%, and the ChiNext Price Index ended 1.1% higher.

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