Global Fundamental Analysis 10/12/2021

Global Fundamental Analysis 10/12/2021, FP Markets

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


U.S. stocks were mostly lower as investors weighed historically low jobless claims data against restrictions worldwide to limit the spread of the Omicron variant. The yield on the 10-year Treasury snapped a three-day rise, settling lower at 1.486%. The WSJ Dollar Index rose to 90.07, helping send gold prices lower. U.S. oil prices dropped, bringing to an end a three-day rally that saw prices surge by 9%.


Australian Market

Australia’s S&P/ASX 200 lost 0.3%, pausing the ascent made against the backdrop of easing Covid-19 worries. Losses among commodity, technology and consumer stocks more than offset any strength elsewhere.


US Market

U.S. stocks continued to trade fitfully, with major indexes mostly lower as investors assessed weekly jobless claims data and the latest global restrictions to limit the spread of the Omicron variant. The S&P 500 dropped 0.7%. The Nasdaq Composite declined 1.7%, with losses accelerating during the afternoon. The Dow Jones Industrial Average gave up earlier gains and finished the day near flat.  

Investors are generally optimistic, said Oanda analyst Edward Moya. Growth in 2022 should be good and U.S. equities should benefit from that, he said, but there is concern about the Omicron coronavirus variant, wage and inflation pressure, and Federal Reserve monetary policy. “I think it’ll be very choppy the rest of the year,” he said.



Gold futures settled lower for the first time in three sessions, amid strength in the U.S. dollar and easing worries surrounding the Omicron variant. Traders have not increased investments in gold given that Omicron fears have eased, said Chintan Karnani, director of research at Insignia Consultants.  

Looking ahead, before the Federal Reserve meeting on monetary policy next week, the market will see the U.S. consumer price index data for November on Friday and producer price index data Tuesday. February gold futures declined by 0.5% to settle at $1,776.70 an ounce.


Oil Futures

Oil futures fell, with the U.S. crude benchmark putting an end to a three-session streak of gains that had lifted prices to a two-week high a day earlier. Restrictions recently imposed in parts of the world to combat the Omicron variant of coronavirus was being blamed for putting some pressure on energy demand and crude oil prices.  

Despite news that the variant may not be as destructive to oil demand as first feared, “more countries worldwide are reintroducing restrictions and other measures to curb climbing case numbers,” said Louise Dickson, senior oil markets analyst at Rystad Energy, in a daily market commentary. That raises “fears that the global market may yet be adversely impacted, and consequently causing a bearish environment for oil prices.

“West Texas Intermediate crude for January delivery fell 2% to settle at $70.94 on the New York Mercantile Exchange, after rising on Wednesday by 0.4% to end at the highest level since Nov. 24 for a most-active contract, marking a third straight daily gain. February Brent crude declined by 1.9% to end at $74.42 a barrel on ICE Futures Europe. Prices fell further after hours amid increasing jitters regarding the U.S. and Iran, after the White House said it is readying “additional measures” if nuclear talks fail.



Major currencies were mostly weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1335 to lows near US$1.1277 and was near US$1.1290 at the US close. The Aussie dollar dipped from highs near US71.86 cents to lows near US71.36 cents and was near US71.50 cents at the US close. But the Japanese yen firmed from 113.66 yen per US dollar to JPY113.27 and was near JPY113.45 at the US close.


European Markets

European sharemarkets ended lower on Thursday. The pan-European STOXX 600 index fell by 0.1% with oil and gas stocks down by 1.1%. The German Dax index lost 0.3%. The UK FTSE index slid 0.2% after British Prime Minister Boris Johnson moved to tighten Covid-19 restrictions in an effort to prevent a spike in hospitalisations and deaths during winter. In London trade, shares in Rio Tinto rose by 0.8%, but shares in BHP dipped by 0.8%.


Asian Markets

Earlier Thursday, Chinese stocks extended their recent upturn, driven by Beijing’s latest stimulus measures and support signals for the country’s property sector. The benchmark Shanghai Composite Index rose 1.0%, while the Shenzhen Composite Index added 0.9%. The ChiNext Price Index, a measure for the performance of emerging industries, also grew 1.0%. The consumer sector, which led to Wednesday’s gains, continued to strengthen. In particular, tourism agencies, hotel operators and beverage makers were among the top risers.

Hong Kong’s Hang Seng Index gained 1.1%, supported by the pharma and property sectors. China’s latest inflation data have proven benign, giving regional markets “a small sigh of relief,” Oanda senior market analyst Jeffrey Halley said. The property sector strengthened. Japanese stocks were dragged lower by auto and electronics stocks, as the Omicron variant has raised concerns over the pace of economic recovery. The Nikkei Stock Average fell 0.5%, following two consecutive sessions of gains.

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