Global Fundamental Analysis 16/02/2022

Global Fundamental Analysis 16/02/2022, FP Markets

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

U.S. stocks ended higher, reversing three days of losses as investors’ fears eased about Ukraine and Russia. The yield on the 10-year Treasury note rose to 2.05%, from 2.00% on Monday. The WSJ Dollar Index fell 0.22% to 89.83. U.S. oil prices ended down by nearly 4% from a seven-year high. And gold prices saw their first losses in eight sessions.

Australian Market

Australia’s S&P/ASX 200 index closed 0.5% lower. Energy stocks were the biggest drag on the benchmark index, closing 3.1% lower, while technology stocks provided a boost, finishing 1.0% higher.


US Market

U.S. stock indexes rose after Russia said it had pulled back some troops from the Ukrainian border. The S&P 500 climbed 1.6%, snapping a three-day losing streak. The blue-chip Dow Jones Industrial Average gained 1.2%, while the technology-heavy Nasdaq Composite Index added 2.5%. The advance came as investors’ fears about a conflict between Ukraine and Russia dampened. Investors also have been weighing inflation concerns, as well as signs of easing supply-chain issues.  

“We have two big crosscurrents. One that has been out there for a while, which is inflation. The other being in the near term – which has ramped up over the last week-which is Russia,” said David Kalis, manager of the Future Fund Active ETF. The Nikkei Stock Average closed 0.8% lower amid uncertainties over the U.S. central bank’s pace of tightening and geopolitical tensions between Ukraine and Russia. Financial stocks were among the worst performers, with Sumitomo Mitsui Financial Group slipping 1.0% and Mitsubishi UFJ Financial Group 2.6% lower.



Gold futures ended lower as the steady march toward conflict in Russia over Ukraine was seen easing somewhat, weakening the case for safe-haven bullion after the commodity rallied to highs not seen since mid November.  

April gold ended 1% lower to trade at $1,851.10 an ounce. For now, gold prices have backed off as Russian President Vladimir Putin has “pulled his needle away from the balloon” that has recently formed in gold prices, fueled by inflation, and the “pain trade is becoming less of a threat,” said Adam Koos, president at Libertas Wealth Management Group.


Oil Futures

Oil futures posted a loss of nearly 4%, a day after settling at their highest level in more than seven years, as Russia said some troops were returning to their bases after military exercises near the border with Ukraine, easing some fears of an invasion. West Texas Intermediate crude for March delivery fell 3.6% to settle at $92.07 a barrel on the New York Mercantile Exchange. April Brent crude, the global benchmark, fell 3.3% to $93.28 a barrel on ICE Futures Europe.  

“The key question for this market is how much Ukrainian war premium is in this market,” said Phil Flynn, senior market analyst at The Price Futures Group, in a note. “If Russia does pull back, can oil fall $10 … or $20 in the event that the Russian-Ukraine situation is diffused?”



Major currencies were mixed against the US dollar in European and US trade. The Euro rose from lows near US$1.1310 to around US$1.1365 and was near US$1.1360 in afternoon US trade. The
Aussie dollar rose from near US71 cents to US71.55 cents and was near US71.50 cents in afternoon US trade. But the Japanese yen eased from near 115.25 yen per US dollar to JPY115.87 and was
near JPY115.62 in afternoon US trade.


European Markets

European sharemarkets were firmer on Tuesday on reports that some Russian troops near Ukraine were returning to their bases. Healthcare rose by 2.2% with shares in AstraZeneca up 5.8% after
positive updates from a late-stage trial for a prostate cancer treatment. The pan-European STOXX 600 index rose by 1.4%. The German Dax index rose 2.0% and the UK FTSE index rose by 1.0%.
In London trade, shares in Rio Tinto fell 1.3% and BHP lost 1.5%.


Asian Markets

Chinese shares closed higher, supported by liquor makers. The Shanghai Composite Index rose 0.5%, the Shenzhen Composite Index advanced 1.4%, and the ChiNext Price Index gained 3.1%. Stocks of Chinese liquor makers were higher amid the festive mood surrounding the Beijing Olympics. Iron-ore stocks may be in focus following reports that Chinese authorities plan to dispatch teams to commodity exchanges and ports to conduct checks on the iron-ore market.

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