Global Fundamental Analysis 16/12/2020

Global Fundamental Analysis 16/12/2020, FP Markets

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


U.S. stocks climbed as Congress appeared closer to making a deal on a stimulus package. The yield on the 10-year Treasury ticked higher to 0.91%. The WSJ Dollar Index fell to 85.48. Oil prices rose as news of a second vaccine nearing approval boosted hopes for an eventual boost to demand. Gold prices climbed amid rising prospects of a U.S. stimulus package.


Australian Market

Australia’s S&P/ASX 200 fell 0.4%, hurt by its heavyweight financial and materials sectors. Mining stocks were among the worst losers after iron ore prices fell with Rio Tinto, BHP and Fortescue giving up between 1.3% and 3.1%.


US Market

U.S. stocks climbed as investors welcomed signs of progress in negotiations over an economic relief package in Washington.

The S&P 500 rose 1.3% as of the 4 p.m. close of trading in New York. That followed four consecutive days of losses, which marked the index’s longest losing streak since September.

The Dow Jones Industrial Average advanced 1.1%. Meanwhile, the technology-heavy Nasdaq Composite gained 1.3%.

A bipartisan group of lawmakers urged Congressional leaders on Monday to forge ahead with a $748 billion spending package that would avoid the thorniest issues holding up a deal.



Gold futures climbed 1.3% to settle at $1,855.30 an ounce, their highest in a week, rebounding from a two week low a day earlier, as prospects for another coronavirus fiscal package gained more traction in Washington before the end of the year.

The move for the metal also comes ahead of Wednesday’s monetary policy announcement from the Federal Reserve.


Oil Futures

U.S. benchmark oil prices rose 1.3% to $47.62 a barrel, the highest closing price since February 26, as investors remained optimistic vaccines will do the trick in sharply reducing the spread of the coronavirus to allow for a stronger recovery in oil demand.

Near-term oil and fuel demand don’t look promising, with much of California under stay-at-home orders and New York City considering a temporary lockdown, even as millions of vaccines are distributed around the country.



Major currencies were stronger against the US dollar in European and US trade. The Euro rose from lows near US$1.2122 to highs near US$1.2167 and was near US$1.2160 at the US close. The Aussie dollar rose from lows near US75.09 cents to highs near US75.71 cents and was near US75.60 cents at the US close. And the Japanese yen rose from near 104.12 yen per US dollar to session highs near JPY103.60 at the US close.


European Markets

European share markets closed mostly higher on Tuesday. The pan-European STOXX 600 index rose by 0.3%, and Germany’s Dax index climbed 1.1%. Volkswagen shares jumped 7.6% after the
German carmaker’s board eased internal corporate tensions by backing CEO Herbert Diess. But the UK FTSE index lost 0.3% as the British pound gained on a report that British and European Union negotiators may be closing in on a Brexit deal. In London trade, shares in Rio Tinto (+1.1%) and BHP (+0.6%) both rose.


Asian Markets

Earlier Tuesday, mainland China’s major stock benchmarks ended broadly higher after official data showed China’s economic activity extended its strong momentum in November with an across-the-board recovery. The benchmark Shanghai Composite Index slipped 0.1%, the Shenzhen Composite Index gained 0.4%, and the ChiNext Price Index advanced 1.2%.

Hong Kong’s Hang Seng Index, however, lost 0.7%, dragged by tech and energy stocks. Japan’s Nikkei Stock Average dropped 0.2%, weighed by financial and aviation stocks. Aviation stocks broadly declined.

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