Global Fundamental Analysis 20/05/2021

Global Fundamental Analysis 20/05/2021, FP Markets

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


U.S. stocks pared losses after a broad retreat from riskier assets. The 10-year Treasury note yield rose to 1.68% from 1.64% Tuesday. The WSJ Dollar Index rose 0.44% to 85.44. U.S. oil prices ended at their lowest in more than three weeks as stocks were in decline and U.S. crude supplies rose. Gold prices extended their winning streak to a fifth session as bitcoin tumbled.


Australian Market

Australia’s S&P/ASX 200 index closed 1.9% lower in its second-biggest fall for the year. The benchmark index’s biggest drop so far in 2021 was 2.35% on Feb. 26. All sectors finished the day in the red, with materials and energy stocks logging the biggest losses.


US Market

U.S. stocks fell alongside commodities, overseas shares and bitcoin as investors’ appetite for risk diminished.  

The Dow Jones Industrial Average declined as much as 587 points in morning trading, before paring its losses, while other markets steadied as well. The Dow fell 0.5%, while the S&P 500 dropped 0.3%. The Nasdaq Composite nearly turned positive on the day, finishing down less than 0.1%.



June gold rose $13.50, or 0.7%, to settle at $1,870.90 an ounce. Prices tallied a fifth-straight climb and marked the most active contract’s highest finish since Jan. 7, FactSet data show. The contract then extended gains in electronic trading to $1,876.50 shortly after the Federal Open Market Committee minutes were released.


Oil Futures

Oil futures declined, tracking a slump in global equities as weekly data from the Energy Information Administration showed an increase in U.S. crude inventories, contributing to a drop to the lowest settlement prices in more than three weeks.  

West Texas Intermediate crude for June delivery fell $2.13, or nearly 3.3%, to settle at $63.36 a barrel on the New York Mercantile Exchange. Based on the front-month contracts, prices finished at their lowest since April 27, according to Dow Jones Market Data.

The June contract will expire at the end of Thursday’s session. July Brent crude, the global benchmark, fell $2.05, or 3%, at $66.66 a barrel on ICE Futures Europe, also the lowest finish since April 27.



Major currencies were generally weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.2245 to lows near US$1.2160 and was near US$1.2175 at the US close. The Aussie fell from near US77.90 cents to US77.10 cents and was near US77.25 cents at the US close. And the Japanese yen held between 108.57 yen per US dollar and JPY109.32 and was near JPY109.20 at the US close.


European Markets

European share markets fell on Wednesday as part of a global pull-back from equities. Miners, travel and technology stocks led to the declines. The focus was on inflation with data showing that UK inflation hit 1.5% in April, the highest in 13 months. Investors also monitored large falls in crypto-currency prices. The pan-European STOXX 600 index lost 1.5%. The German Dax index fell by 1.8% and the UK FTSE index fell by 1.2%. In London trade shares in Rio Tinto fell by 3.4% and shares in BHP fell by 4.6%.


Asian Markets

The Nikkei Stock Average closed 1.3% lower, dragged by falls in machinery and auto stocks, as economic uncertainty continues amid the prolonged Covid-19 pandemic.  

Chinese stock markets closed the session mixed, extending Tuesday’s muted trade. The benchmark Shanghai Composite Index fell 0.5%, weakening after a three-day winning streak.

The Shenzhen Composite Index edged up 0.1%, while the ChiNext Price Index grew 0.8%. Oil stocks, among the best performers the past session, led market losers, as crude prices withdrew amid expectations of higher Iran supply as a potential revival of the Iran nuclear deal progresses. Renewable energy firms and automakers were the top winners.

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