Global Fundamental Analysis 29/06/2021

Global Fundamental Analysis 29/06/2021, FP Markets

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

U.S. stocks ended mixed, with the S&P 500 and Nasdaq notching record closes. The 10-year Treasury yield fell to 1.47% from 1.54% Friday. The WSJ Dollar Index rose 0.09% to 86.63. U.S. oil prices marked their lowest settlement in more than a week. Gold prices ended higher, extending gains from last week.


Australian Market

Australia’s S&P/ASX 200 index closed flat as the country faced increased restrictions and state border closures amid a widening Covid-19 outbreak.

The benchmark index gained some momentum as New South Wales state reported fewer locally acquired Covid-19 cases compared with the previous day, before falling back by the close.

Travel stocks bore some of the brunts. The financial and materials sectors, which together comprise almost 50% of the ASX 200’s market capitalization, fell 0.1% and rose 0.2%, respectively.


US Market

The S&P 500 and Nasdaq Composite advanced to record closes, as U.S. stocks mostly rose.

The tech-heavy Nasdaq advanced 1% as the S&P 500 added 0.2%. Last week, the broad-based index posted its biggest weekly advance since February and closed Friday at a record.

The Dow Jones Industrial Average fell 0.4%. Investors said financial markets are likely to be quiet this week in the run-up to Friday’s employment report. That is expected to show the economy added 683,000 jobs in June.



Gold futures scored back-to-back session gains, after posting the first weekly price gain in four weeks, as traders look to the U.S. dollar, ahead of key economic data this week, for hints on the dollar-denominated precious metal’s next move.  

August gold climbed 0.2% to settle at $1,780.70 an ounce on Comex. This coming Friday’s monthly U.S. jobs report is “probably the most consequential economic report of the week,” said Michael Armbruster, managing partner at Altavest.


Oil Futures

Oil futures marked their lowest finish in more than a week, pulling back after a recent rise to their highest levels since October 2018.  

Concerns that the spread of a Covid variant in Europe and Austria will lead to less travel, easing demand for fuel, put pressure on oil prices, as traders awaited a decision this week by the Organization of the Petroleum Exporting Countries and its allies on crude production levels.  

West Texas Intermediate crude for August delivery fell 1.5% to settle at $72.91 a barrel on the New York Mercantile Exchange. September Brent crude, the most actively traded contract for the global crude benchmark, fell 1.6% at $74.14 a barrel on ICE Futures Europe. August Brent crude, which expires at the end of Wednesday’s trading session, fell 2% to $74.68 a barrel.



Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.1940 to lows near US$1.1900 and was near US$1.1920 at the US close. The Aussie dollar fell from highs near US76.00 cents to lows near US75.55 cents and was near US75.65 cents at the US close. But the Japanese yen rose from 110.97 yen per US dollar to JPY110.50 and was near JPY110.60 at the US close.


European Markets

European share markets fell on Monday with travel stocks leading the losses. The Times reported that Germany was considering a ban on British travellers to the European Union, regardless of their vaccination status, because of the highly contagious, widespread Delta variant of the coronavirus. And Hong Kong announced a ban on passenger flights from the UK. Airlines fell by 4-6%. The pan-European STOXX 600 index fell by 0.6%. The German Dax index eased by 0.3%. The UK FTSE index lost 0.9%. In London trade, shares in Rio Tinto fell by 1.0% with shares in BHP lower by 0.7%.


Asian Markets

Japan’s Nikkei Stock Average closed 0.1% lower as declines in electronics stocks offset gains in retail and steel stocks.  

Chinese stocks ended the session broadly higher amid some upbeat sentiment with the upcoming 100th anniversary of the country’s ruling Communist Party. Automakers were among the best performers.

The Shanghai Composite Index closed down 0.03%, the Shenzhen Composite Index gained 0.9%, while the ChiNext Price Index, which measures emerging industries and startups, closed 1.9% higher.

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