Global Fundamental Analysis 24/12/2020

Global Fundamental Analysis 24/12/2020, FP Markets

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


U.S. stocks settled mostly higher amid mixed economic data and a veto threat lodged toward the U.S. stimulus bill Congress just passed. The yield on the 10-year Treasury rose to 0.95%.

The WSJ Dollar Index fell to 85.48. Oil prices shot higher after data showed a drop in U.S. inventories. Gold prices rose on the back of a weaker dollar.


Australian Market

Australian shares closed up 0.7% at 6643.1, lifted by broad-based gains from real estate and industrial to consumer stocks.

The rise snapped a three-day losing streak, putting December’s gains back at 1.9%. Miners were the exception, with an 0.4% pullback in the country’s materials index following a slip in some commodity prices.


US Market

U.S. stocks edged higher, despite a string of data suggesting the economic rebound remains uneven amid the recent surge in coronavirus hospitalizations.

The S&P 500 ticked up 0.1% as of 4 p.m. ET, following three consecutive sessions of declines. The Dow Jones Industrial Average rose 0.4%, while the technology-focused Nasdaq Composite slipped in the last 30 minutes of trading to finish down 0.3%.

U.S. household spending fell in November for the first time since April, and incomes also dropped, signs the virus is weighing on economic growth. Jobless claims fell to 803,000 last week, a retreat from a three-month high.

Investors shrugged off President Trump’s request for lawmakers to amend the roughly $900 billion coronavirus relief deal to increase direct payments to American families.

Mr Trump’s aides said they view his comments more as the president voicing his displeasure with the bill passed Monday than an actual veto threat. If the president doesn’t sign or veto the bill within 10 days after it is passed, it will become law without his signature. If he does reject the bill, Congress could still vote to override his veto.



Gold futures ended higher, with the precious metal halting a three-day decline, as the U.S. dollar softened. A series of U.S. economic reports, published early due to the holiday-shortened week, saw bullion enjoy a pop higher as the U.S. dollar retreated.

February gold traded 0.4% higher to close at $1,878.10 an ounce. If the metal had closed lower, it would have represented its longest bout of weakness since the period ended April 20.


Oil Futures

Crude-oil futures closed sharply higher as a report from the Energy Information Administration showed a drop in U.S. inventories, and favourable geopolitical developments appeared to clear possible roadblocks to further demand for energy assets.

West Texas Intermediate crude for February delivery closed 2.3% higher at $48.12 a barrel.

February Brent crude added 2.2% to settle at $51.20 a barrel on ICE Futures Europe. For the week, WTI is on pace for a weekly slump of 2.5%, while Brent is on track for a weekly decline of 2.1%, FactSet data show, based on the most-active contracts.



Major currencies were mostly firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.2161 to highs near US$1.2216 and was near US$1.2190 at the US close. The Aussie dollar rose from lows near US75.42 cents to highs near US75.89 cents and was near US75.80 cents at the US close. But the Japanese yen eased from near 103.36 yen per US dollar to JPY103.65 and was near JPY103.55 at the US close.


European Markets

European sharemarkets rose on Wednesday on signs of an imminent Brexit trade deal. The pan-European STOXX 600 index lifted 1.1% and the German Dax index gained 1.3%. The UK FTSE index rose 0.7%. Bloomberg reported that UK and EU negotiators have reached the outline of a post-Brexit trade agreement and are now working to finalise the wording of the deal. France also agreed to lift its UK border closures, boosting sentiment. In London trade, shares of Rio Tinto rose by 0.4% and BHP shares lifted 0.3%.


Asian Markets

Earlier Wednesday, Hong Kong stocks ended the session higher, as the market recovered from three consecutive sessions of declines. The benchmark Hang Seng Index added 0.9% to 26343.10. Consumer-product makers led the gains.

Japanese stocks ended higher as gains in electronics and pharmaceutical stocks helped offset losses in auto and financial shares. Industrial robot company Yaskawa Electric gained 3.7% and Chugai Pharmaceutical rose 3.4% while Nissan Motor fell 3.1% and Dai-ichi Life Holdings dropped 2.8%. The Nikkei Stock Average added 0.3%

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