Global Fundamental Analysis 18/08/2021

Global Fundamental Analysis 18/08/2021, FP Markets

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


U.S. stocks ended lower, stumbling on bearish retail and home-building data. The 10-year Treasury note yield was about steady at 1.258% versus 1.255% on Monday. The WSJ Dollar Index rose 0.54% to 87.77. U.S. oil prices stretched their losing streak to a fourth session as demand worries prevailed. Gold futures posted their first loss in three sessions.


Australian Market

Australia’s S&P/ASX 200 index closed 0.9% lower, dragged lower by shares in the country’s largest companies. The financial and materials sectors led the losses, as shares in 16 of the 20 largest companies by market capitalization fell. The health sector pared overall index losses, gaining 0.4%. The index’s close was its lowest since Aug. 4.


US Market

U.S. stocks slid, retreating from a stretch of records as weaker-than-expected economic data and concerns about the Delta variant of the coronavirus weighed on investor optimism.  

The S&P 500 fell 0.7%, while the Dow Jones Industrial Average tumbled 0.8%. The Nasdaq Composite, meanwhile, slid 0.9%. Data from the Commerce Department showed that spending at U.S. retailers pulled back sharply in July.

Meanwhile, shares of home builders also pulled back after new data showed that home-builder confidence in the U.S. declined in August, falling to its lowest level since July of last year.



Gold futures ended lower, with prices easing back from intraday highs near the key $1,800 mark and suffering their first loss in three sessions, just a day after marking their highest settlement since early August.  

December gold fell by 0.1% to settle at $1,787.80 an ounce after trading as high as $1,797.60 during the session. On Monday, prices booked the loftiest finish since Aug. 5, FactSet data show.


Oil Futures

Oil futures stretched their streak of losses to a fourth session as investors continued to fret over the outlook for demand due to the ongoing spread of the Delta variant of the coronavirus.

West Texas Intermediate crude for September delivery lost 1% to settle at $66.59 a barrel on the New York Mercantile Exchange. That was the lowest front-month contract finish since Aug. 9, according to Dow Jones Market Data. October Brent crude, the global benchmark, fell 0.7%, at $69.03 a barrel on ICE Futures Europe, the lowest finish since July 19.

“The fundamental outlook for oil is mixed as in the immediate term,” analysts at Sevens Report Research wrote in Tuesday’s newsletter. Delta fears are weighing on demand expectations but in the medium term, a “global supply deficit is expected to last through year-end.”



Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1785 to lows near US$1.1708 and was near the lows at the US close. The Aussie dollar eased from highs near US73.10 cents to lows near US72.43 cents and was near US72.50 cents at the US close. And the Japanese yen eased from near 109.12 yen per US dollar to JPY109.64 and was near JPY109.58 at the US close.


European Markets

European sharemarkets were mixed on Tuesday. News that the eurozone economy rose by 2% in the June quarter balanced news of rising Covid cases in Asia. Automakers fell 1.8%, banks lost 1.2% and travel & leisure fell by 1%. The pan-European STOXX 600 index rose by 0.1%. The German Dax index was flat. The UK FTSE index gained 0.4%. In London trade shares in Rio Tinto fell by 1.0% but shares in BHP rose by 3.4% in response to the latest profit figures.


Asian Markets

Japan’s Nikkei Stock Average reversed early gains to close 0.4% lower, as investors adopted a cautious mood ahead of major U.S. data such as retail sales and Fed Chairman Jerome Powell’s virtual town hall with teachers and students. Losses on the benchmark index were led by a mixed bag of companies.  

Chinese stocks ended the session sharply lower as the market’s downturn intensified after official data released Monday showed economic activities slowed more drastically than expected. The Shanghai Composite Index closed 2.0% lower while the Shenzhen Composite Index lost 2.5%. The ChiNext Price Index fell 2.3%. Consumer service providers such as tourism agencies and food and beverage sellers led the declines.

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