Global Fundamental Analysis 11/07/2022

Global Fundamental Analysis 11/07/2022, FP Markets

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


U.S. stocks ended mixed as jobs growth data remained strong. The yield on the 10-year Treasury note advanced to 3.08% versus 3.01% on Thursday. The WSJ Dollar Index fell 0.09% to 98.76. Oil prices finished higher but logged a weekly loss as recession fears swirled. And gold futures ended slightly higher, but lower for the week.


Australian Market

Australia’s S&P/ASX 200 index closed 0.45% higher, completing its biggest weekly gain since mid-March. Commodity, tech and industrial stocks led local gains, with shares of coal, oil, gold, lithium and iron-ore companies all rising. Lithium miners Lynas, Mineral Resources, Pilbara Minerals and Liontown put on between 4.5% and 7.4%. Gold miner St Barbara jumped 9.6% after hitting its fiscal-year output guidance. The ASX 200 added 2.1% for the week.


US Market 

The S&P 500 inched lower, avoiding a fifth consecutive session of gains after the latest monthly jobs report beat expectations. The S&P 500 was down 0.1% while the Dow Jones Industrial Average slipped 0.2%. The tech-focused Nasdaq Composite Index inched up around 0.1%. The Labor Department’s June jobs report showed that rising interest rates and high inflation are so far not affecting hiring, which remains strong.

The U.S. economy added 372,000 jobs in June, well above the 250,000 expected by economists surveyed by The Wall Street Journal. “On one hand, it’s great to see durable demand for jobs, but pressure on the (Federal Reserve) to hike rates will depress the bulls,” said Mike Bailey, director of research at FBB Capital Partners.



Gold prices settled higher, after briefly slipping back in the wake of better-than-expected U.S. jobs data, but posted a fourth-consecutive weekly loss as overall strength in the U.S. dollar pressured commodity prices. August gold August tacked on nearly 0.2% to $1,742.30 per ounce. Prices for the most-active contract, which settled Wednesday at their lowest since late September 2021, marked a weekly loss of 3.3%, according to Dow Jones Market Data.


Oil Futures

Oil futures finished higher, but logged a weekly loss as fears of recession outweighed tight global supplies of crude. West Texas Intermediate crude for August delivery climbed 2% to settle at $104.79 a barrel on the New York Mercantile Exchange, with the front-month contract posting a 3.4% weekly fall.

September Brent crude, the global benchmark, rose 2.3% to $107.02 a barrel on ICE Futures Europe, but suffered a 4.1% weekly decline. Oil prices extended their gains for the day in the wake of a stronger-than-expected reading on U.S. job creation in June, which helped to ease worries about a possible recession that would hurt energy demand.



Major currencies were mixed against the US dollar in European and US trade. The Euro rose from lows near US$1.0076 to highs near US$1.0188 and was near US$1.0185 at the US close. And the
Aussie dollar lifted from lows near US67.93 cents to highs near US68.73 cents and was near US68.55 cents at the US close. But the Japanese yen eased from near 135.50 yen per US dollar to near
JPY136.55 and was near JPY136.10 at the US close. The yen rose 0.5% immediately after former Japanese prime minister Shinzo Abe was assassinated in Nara, but ceded most of those gains.


European Markets

European sharemarkets were firmer on Friday. The pan-European STOXX 600 index rose by 0.5%, with auto shares up 3.3% to lead gains. The index ended the week up 2.5%. The German Dax index gained 1.3% on Friday. Porsche shares jumped 6.1%. The UK FTSE index edged 0.1% higher. In London trade, shares of Rio Tinto shed 0.5% and BHP shares dipped 1.9%.


Asian Markets

Earlier, in Asia, Japan’s Nikkei Stock Average ended 0.1% higher after paring some earlier gains following news that former Prime Minister Shinzo Abe was shot during a speech. Energy and financial stocks led the gains. Oil explorer Inpex advanced 2.7% and Resona Holdings climbed 2.3%. Chinese stocks ended ended lower as the auto sector retreated slightly from its recent gains amid Beijing’s continued policy support for the industry.

The benchmark Shanghai Composite Index edged down 0.2% and the Shenzhen Composite Index was 0.3% lower. The tech-heavy ChiNext Price Index was the top loser with a 1.1% drop. Passenger car makers, car dealers and auto service providers led the downturn, after the sector jumped on Thursday on the back of officials’ plan for more consumption stimulus in the industry.

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Source - database | Page ID - 21809

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