Global Fundamental Analysis 20/08/2021

Global Fundamental Analysis 20/08/2021, FP Markets

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


U.S. stocks ended mixed in a bumpy trading day. The 10-year Treasury note yield fell to 1.25% from 1.27% on Wednesday. The WSJ Dollar Index rose 0.45% to 88.24. U.S. oil prices dropped nearly 3% to three-month lows on Covid worries and a strong dollar. Gold futures settled lower for a third session as some upbeat U.S. economic data have dulled haven demand. 


Australian Market

Australia’s S&P/ASX 200 index closed 0.5% lower, sealing its longest losing streak since October amid losses in commodity stocks. The materials sector shed 3.7% and energy lost 2.7% against a backdrop of lower iron-ore and oil prices.

US Market

U.S. stocks were mixed, with the S&P 500 edging higher, stabilizing after a bumpy morning and two days of declines. The broad U.S. stock index gained 0.1%, but the Dow Jones Industrial Average hovered around the flat line and ended the day 0.2% lower.

The tech-heavy Nasdaq Composite added 0.1%. Stocks hit turbulence this week after major indexes posted a series of record highs. Investors broadly remain upbeat about the outlook for share prices given the rapid pace of earnings growth.

But some have become more cautious, concerned that rising coronavirus cases will dent the global economic recovery at the same time as the Federal Reserve gears up to rein in its huge bond-buying program.



Gold futures finished lower, suffering a third-straight session decline, with strength in the U.S. dollar and some upbeat economic data helping to dull haven demand for the precious metal.  

December gold fell nearly 0.1% to settle at $1,783.10 an ounce, after ending 0.2% lower on Wednesday, ahead of the release of the Fed minutes.

Gold prices initially moved up, then headed lower, after weekly U.S. jobless claims data showed a drop of 29,000 to 348,000 in the week ended Aug. 14, a 17-month low, but Philadelphia’s Federal Reserve reported that its business activity index fell to 19.4 in August from 21.9 in July.


Oil Futures

Oil futures stretched their losses into a sixth-straight session, with prices settling at their lowest since May as the spread of the coronavirus Delta variant underlines worries about the demand outlook, and as the U.S. dollar rallied.

West Texas Intermediate crude for September delivery fell 2.7% to settle at $63.69 a barrel on the New York Mercantile Exchange ahead of its expiration at Friday’s settlement. The most actively traded October contract dropped 2.6% to $63.50 a barrel.

October Brent crude, the global benchmark, lost 2.6% at $66.45 a barrel on ICE Futures Europe.



Major currencies were mixed against the US dollar in Europe and US trade. The Euro rose from lows near US$1.1667 to highs near US$1.1703 and was near US$1.1675 at the US close. The Aussie dollar fell from highs near US71.88 cents to lows near US71.43 cents and was near US71.50 cents at the US close. And the Japanese yen rose from near 110.14 yen per US dollar to JPY109.48 and was near JPY109.75 at the US close.


European Markets

European share markets closed lower on Thursday. The pan-European STOXX 600 index shed 1.5% with mining shares down 4.2%. Shares of Danish hearing aid maker GN Store Nord slid 12.3% after reporting its second-quarter results. The German Dax index fell by 1.3% and the UK FTSE index lost 1.5%. UK-listed shares in Rio Tinto fell by 2.7% and shares in BHP dropped 2.5%.


Asian Markets

Japan’s Nikkei Stock Average dropped 1.1%, dragged by trading companies and auto-related names. The release of FOMC minutes, which indicated a more hawkish view on the massive stimulus being provided to the U.S. economy, caused a decline in sentiment, said AvaTrade.

Chinese stocks ended the session mixed, snapping a short-lived rebound on Wednesday. The benchmark Shanghai Composite Index fell 0.6% while the Shenzhen Composite Index added 0.2%.

The ChiNext Price Index rose 0.9%. Financial stocks, which jumped in the past session to lift the market, led the losers Thursday. The decline was offset by the telecom sector, which tracked higher optimism ahead of China Telecom’s blockbuster Shanghai debut on Friday.

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