Global Fundamental Analysis 21/12/2020

Global Fundamental Analysis 21/12/2020, FP Markets

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


U.S. stocks lost ground for the day, but still managed to post gains on the week as investors tracked continuing economic stimulus talks. The yield on the 10-year Treasury ticked higher to 0.95%.

The WSJ Dollar Index rebounded to reach 85.13. Oil prices continued to rise as investors maintain the view that vaccines will lead to a rebound in demand. Gold prices fell, ending a recent run higher.


Australian Market

Australia’s S&P/ASX 200 lost 1.2% after a Covid-19 cluster in Sydney raised worries that the country’s economic recovery could be derailed. Tech was the biggest loser, but the financial sector’s size meant its 2.1% fall hit the market hardest.


US Market

U.S. stocks edged lower but notched weekly gains, as investors tracked developments on a coronavirus aid package.

The S&P 500 slipped 0.4%. The Dow Jones Industrial Average lost 0.4%. The Nasdaq Composite shed 0.1%.

The stock moves mark a pause after major U.S. indexes clinched fresh highs during the week on optimism about a stimulus package.

The S&P 500 and Dow rose 1.3% and 0.4%, respectively for the week. The Nasdaq added 3.1% on the week.



Gold prices finished lower, easing back from a recent run to a nearly six-week high, but weakness in the U.S. dollar helped the precious metal tally a third consecutive weekly advance.

February gold fell nearly 0.1% to settle at $1,888.90 an ounce on Friday, following a 1.7% gain on Thursday that pushed the metal to its highest finish since Nov. 6, according to FactSet data.


Oil Futures

Oil futures settled higher to score a seventh straight weekly climb, as traders remained optimistic about vaccine rollouts and prospects for U.S. lawmakers to reach a deal on an economic relief package.

Adding further support to prices, a lower oil-demand forecast from the Organization of the Petroleum Countries this week makes it unlikely that OPEC and its allies will significantly increase global supply when it meets in early January, said Rob Thummel, portfolio manager at Kansas-based investment company, Tortoise.

West Texas Intermediate crude for January delivery rose 1.5% to settle at $49.10 a barrel on the New York Mercantile Exchange – the highest front-month contract finish since Feb. 25, according to Dow Jones Market Data.

February Brent crude tacked 1.5% to $52.26 a barrel on ICE Futures Europe, for the highest settlement since Feb. 26.



Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.2267 to lows near US$1.2225 and was near US$1.2255 at the US close. The Aussie dollar rose from lows near US75.82 cents to session highs near US76.24 cents at the US close. And the Japanese yen rose from near 103.58 yen per US dollar to JPY103.19 and was near JPY103.30 at the US close.


European Markets

European share markets closed lower on Friday. The pan-European STOXX 600 index fell 0.4% but rose 1.5% over the week. The German Dax index lost 0.3%, despite a surprise lift in German Ifo
business morale in December. And the UK FTSE index also fell by 0.3% on pessimism over prospects for a post-Brexit trade deal. In London trade, Rio Tinto rose 0.9%, but BHP shares fell 0.1%.


Asian Markets

 Earlier Friday, Chinese stocks ended the session lower after the U.S. added more than 60 Chinese institutions, including SMIC, the country’s largest chip maker, to an export blacklist. The benchmark Shanghai Composite Index fell 0.3%, the Shenzhen Composite Index retreated 0.3% and the ChiNext Price Index lost 0.2%.

Hong Kong stocks also ended the session lower, losing 0.7%.

Japan’s Nikkei Stock Average slipped 0.2%, weighed down by real-estate and transportation stocks amid concerns over slowing travel demand.

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