Global Fundamental Analysis 30/12/2020

Global Fundamental Analysis 30/12/2020, FP Markets

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

U.S. stocks reached record highs after President Trump signed a second stimulus bill into law. The yield on the 10-year Treasury ticked lower to 0.92%. The WSJ Dollar Index rose to 85.5. Oil prices fell amid expectations of a holiday Covid surge. Gold prices slipped in light of a firmer dollar.

Australian Market

Markets in Australia and New Zealand were closed in observance of Boxing Day.


US Market

U.S. stocks rose to new heights after President Trump signed a Covid-19 aid bill, averting a government shutdown and ending uncertainty about the rollout of the spending package.

The Dow Jones Industrial Average added 0.7%. The S&P 500 advanced 0.9% and the Nasdaq Composite gained 0.7%. All three indexes closed at record levels.

Mr Trump’s signing of the $900 billion bills paves the way for the government to make direct payments to U.S. households as the surging coronavirus pandemic continues to disrupt business and social activity. Investors expect that the additional spending will help cushion the economy amid restrictions put in place by states and local authorities to manage Covid-19’s spread in the winter.



Gold futures finished lower, after back-to-back gains, giving up an early rise in a choppy trading session as investors deemed some firmness in the U.S. dollar and a global stock rally sufficient headwinds for bullion.

Gold for February delivery shed 0.1% to settle at $1,880.40.


Oil Futures

Oil futures settled lower, fading after getting an early boost following President Donald Trump’s decision over the weekend to reverse course and sign legislation that includes $900 billion in aid to consumers and small businesses.

West Texas Intermediate crude for February delivery fell 1.3% to close at $47.62 a barrel on the New York Mercantile Exchange, after trading as high as $48.96. February Brent crude declined 0.8% to settle at $50.86 a barrel on ICE Futures Europe.

The early rally “faded in the face of an expected holiday spike in Covid-19 misery, and the seemingly imminent approval of another 500,000 [barrels a day] of OPEC+ crude oil at the January 4 monthly meeting,” said Robert Yawger, director of energy at Mizuho Securities, in a note.



Major currencies were mostly firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.2235 to highs near US$1.2275 and was near US$1.2250 at the US close. The Aussie dollar rose from lows near US75.90 cents to highs near US76.25 cents and was near US76.10 cents at the US close. And the Japanese yen lifted from lows near 103.75 yen per US dollar to JPY103.45 and was near JPY103.53 at the US close.


European Markets

European sharemarkets rose on Tuesday, supported by the Brexit trade deal, US stimulus package and vaccine rollout. The pan-European STOXX 600 index lifted by 0.8%, up for the fifth straight
session and to fresh 10-month highs. But while the UK FTSE rose by 1.6%, the German Dax index lost 0.2% from record highs. Shares in AstraZeneca rose 3.3% on news that the British government is expected to approve COVID-19 vaccine shots for emergency use within a few days. In London trade shares in Rio Tinto rose 1% and shares in BHP rose 0.5%.


Asian Markets

Earlier Monday, Chinese stocks ended the session little changed. The benchmark Shanghai Composite Index edged up 0.02%, while the Shenzhen Composite Index lost a mere 0.04%.

The ChiNext Price Index added 0.1%. Consumer-product sectors such as food-and-beverage stocks and home-appliance makers were the top risers, while financial and telecommunication industries weighed on the market. Hong Kong’s Hang Seng Index fell 0.3%.

Japanese stocks rose 0.7%, led by electronics stocks after President Trump signed a pandemic-aid bill. A brighter U.S. economic outlook has helped offset concerns about domestic Covid-19 containment measures.

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