Global Fundamental Analysis 12/04/2022

Global Fundamental Analysis 12/04/2022, FP Markets

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

U.S. stocks advanced as investors mulled the possibility of more aggressive actions by the Federal Reserve. The yield on the 10-year Treasury climbed to 2.66%, reaching a three-year high. Dollar strength continued as the WSJ Dollar Index reached 92.19. U.S. oil prices continued their decline, reaching a new, three-week-low. Gold prices scored their first gain of the week.

Australian Market

Australia’s S&P/ASX 200 gave back 0.6% as weakness in technology stocks continued to weigh on the benchmark. At the same time, Australia’s February trade surplus for February contracted more than expected due to a surge in imports. The technology sector dropped 3.4%, while consumer discretionary stocks lost 1.6%.


US Market 

U.S. stocks rose as investors digested the possibility of more aggressive monetary tightening by the Fed and monitored the war in Ukraine. Stocks moved into the green in the afternoon, but were down for much of the day. The S&P 500 gained 0.4%. The technology-focused Nasdaq Composite Index ticked about 0.1% higher, while the Dow Jones Industrial Average rose 0.3%. Eight of the S&P 500’s sectors were positive, with consumer staples leading the advancers. “I guess we have a little bit of a hangover from the FOMC minutes,” said Oanda analyst Edward Moya. Investors are trying to get a better sense of where the economy goes and how that affects the Fed’s monetary policy, he said.



Gold futures posted their first gain in three sessions to log their highest settlement in a week. The value of the precious metal has been determined by “countering forces,” said Ricardo Evangelista, senior analyst at ActivTrades. On one side, there’s the “the geopolitical risk generated by the war in Ukraine, which enhances gold’s haven appeal,” and on the other, “the increasingly hawkish stance of the U.S. Federal Reserve, which is capping gold gains due to the inverted correlation with the U.S. dollar, ” he said. Gold futures for June delivery rose 0.8% to settle at $1,937.80 an ounce on Comex – the highest most-active contract finish since March 31, FactSet data show.


Oil Futures

Oil futures suffered a third straight loss, with global Brent crude prices briefly dipping under $100 a barrel for the first time in three weeks, a day after the announcement of a coordinated release of crude from strategic reserves by member countries of the International Energy Agency. Natural-gas futures, meanwhile, marked their highest finish since December 2008, buoyed by tight supplies as a rise in coal prices lifted demand for the energy source.  

The IEA announced a coordinated release of 120 million barrels of crude, half of which would come from the U.S. as part of that country’s previously announced 180 million barrel release over the next six months. “These volumes are significant, but still fall short of the 2 [million barrels a day] of Russian losses that we estimate due to self-sanctioning,” said Warren Patterson, head of commodities strategy at ING, in a note.  

Overall, analysts across the oil industry are torn over whether the coordinated release from global reserves will “sustain the oil market,” or if it will allow the Organization of the Petroleum Exporting Countries to further delay an output increase that would truly drive down prices long term, wrote analysts on StoneX’s energy team in Kansas City. West Texas Intermediate crude for May delivery lost 0.2% to settle at $96.03 a barrel on the New York Mercantile Exchange. June Brent crude declined by 0.5%, closing at $100.58 a barrel on ICE Futures Europe. May natural gas rose 5.5% to $6.359 per million British thermal units, the highest front-month finish since December 2008.



Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0932 to lows near US$1.0872 and was near US$1.0880 at the US close. The Aussie dollar fell from highs near US74.59 cents to lows near US74.13 cents and was near US74.15 cents at the US close. And the Japanese yen eased from 124.93 yen per US dollar to JPY125.73 and was near JPY125.35 at the US close.


European Markets

European sharemarkets closed lower on Monday. The panEuropean STOXX 600 index fell by 0.6%, led by a 2% dip in technology shares. France’s CAC 40 index inched up 0.1% as partial results put President Emmanuel Macron in first place after the first round of voting in the presidential election on Sunday. The German Dax index lost 0.6% and the UK FTSE index slid 0.7%. In London
trade, shares of Rio Tinto fell by 1.1% and BHP shares shed 3.1%.


Asian Markets

Earlier Thursday, China stocks lost ground, extending a muted showing since the market resumed trading after a two-day holiday earlier this week. The benchmark Shanghai Composite Index fell 1.4%, while the Shenzhen Composite Index shed 1.9%. The ChiNext Price Index was the worst performer with a 2.1% decline. The property sector led the downturn amid weak March sales data.

Hong Kong’s benchmark Hang Seng Index retreated 1.2%. Consumer companies led losses, with restaurant operator Haidilao falling 7.2% and Budweiser Brewing down 3.8%. Tech stocks further weighed on the market amid profit-taking. The Nikkei Stock Average dropped 1.7% amid concerns over the Fed’s tightening pace and higher corporate-borrowing costs. Aviation stocks fell, with Japan Airlines declining 2.6% and ANA Holdings slipping 2.0%.

Start Trading
in Minutes

bullet Access 10,000+ financial instruments
bullet Auto open & close positions
bullet News & economic calendar
bullet Technical indicators & charts
bullet Many more tools included

By supplying your email you agree to FP Markets privacy policy and receive future marketing materials from FP Markets. You can unsubscribe at any time.

Source - cache | Page ID - 21821

Get instant Updates in Telegram