Global Fundamental Analysis 07/06/2021

Global Fundamental Analysis 07/06/2021, FP Markets

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


U.S. stocks closed near records after the jobs report. The 10-year Treasury yield fell to 1.559%, its lowest level since late April, from 1.624% Thursday. The WSJ Dollar Index fell 0.47% to 85.24. U.S. oil prices traded near a two-year high, but a demand recovery was still in doubt. Gold prices ended higher, paring a weekly loss after U.S. employment data missed estimates.


Australian Market

Australia’s S&P/ASX 200 index ended 0.5% higher, rounding off the week with a third consecutive record close. Health, utility and financial stocks led gains. A selloff in gold stocks helped push the materials sector down 1.5%, while iron-ore miners BHP, Rio Tinto and Fortescue all pared strong weekly gains. The ASX 200 added 1.6% for the week.


US Market

U.S. stocks rose, closing the week with modest gains after the monthly employment report showed the labour market continued its slow recovery in May.  

The Dow Jones Industrial Average gained 0.5% while the S&P 500 added 0.9%. Both indexes closed just below their all-time closing highs. The Nasdaq Composite advanced 1.5%.  

The gains allowed U.S. stocks to post muted advances for the week, even after a pullback in shares of health and consumer-discretionary companies partially offset broad gains across other sectors.  

The Nikkei Stock Average ended 0.4% lower at 28941.52 as falls in tech stocks help offset gains in steel and auto shares.



Gold prices ended higher after the Labor Department reported that the U.S. created 559,000 new jobs in May, missing Wall Street estimates and suggesting the Federal Reserve may maintain its easy-money policies for longer.  

Gold for August delivery climbed 1% to settle at $1,894.10 an ounce, after losing 1.9% on Thursday to end at its lowest since May 18. Prices based on the most active contracts logged a loss of 0.7% for the week, FactSet data show.


Oil Futures

Oil prices climbed to their highest levels in more than two years as traders bet that recovery in demand this summer will lead to tighter crude supplies. Demand recovery, however, isn’t a sure thing.  

“There are a lot of moving parts in oil markets at the moment, but … the key upside support right now is the growing realization that demand is recovering” from the pandemic, said Matthew Parry, head of long-term analysis at Energy Aspects. “Market expectations for this summer’s demand recovery are lofty, though the jury is still out for whether these will be fully realized,” said Parry.  

The July West Texas Intermediate crude futures contract was up nearly 0.7% at $69.26 a barrel on the New York Mercantile Exchange, with the front-month looking at a weekly rise of around 4.4%. Global benchmark August Brent crude tacked on 0.4% to $71.57 on ICE Futures Europe, trading roughly 4.2% higher for the week.



Major currencies were stronger against the US dollar in European and US trade after the US jobs data was issued. The Euro rose from lows near US$1.2103 to highs near US$1.2182 and was near
US$1.2170 at the US close. The Aussie dollar lifted from lows near US76.52 cents to highs near US77.45 cents and was near US77.40 cents at the US close. And the Japanese yen rose from 110.27 yen per US dollar to JPY109.36 and was near JPY109.50 at the US close.


European Markets

European sharemarkets rose on Friday. The pan-European STOXX 600 index lifted by 0.4% to a new closing high, having earlier hit an alltime high. The index added 0.8% for the week. The German Dax index also gained 0.4%. But the UK FTSE index was up just 0.1% with shares of British Airways owner IAG down by 0.9% after the UK removed Portugal from its “green list” of travel destinations. UK-listed shares in Rio Tinto (+0.8%) and BHP (+0.9%) both rose.


Asian Markets

Chinese stock markets finished the session higher, reversing two straight days of losses, supported by battery makers and liquor stocks. The Shanghai Composite Index rose 0.2%, the Shenzhen Composite Index gained 0.6% and the ChiNext Price Index, which measures emerging industries and startups, closed 1.3% higher.

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