Global Fundamental Analysis 31/08/2022

Global Fundamental Analysis 31/08/2022, FP Markets

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

U.S. stocks ended lower as strong labor-market data heightened Fed fears. The yield on the 10-year Treasury was unchanged at 3.11% from Monday. The WSJ Dollar Index rose 0.15% to 100.24. Oil prices dropped as supply concerns eased. And gold futures ended lower for a third-straight session.

Australian Market

Australia’s S&P/ASX 200 index closed 0.5% higher, recovering some ground from its steep week-opening losses. Ten of 11 sectors rose, led by tech, energy and consumer staples. The tech sector added 1.8%, a day after tumbling 4.4%. The materials sector closed flat.

US Market 

U.S. stocks extended their losses to a third straight session as economic data fanned investors’ fears that the Federal Reserve has ample runway to continue raising interest rates aggressively. Each of the major indexes declined, building on a sharp selloff in the wake of a reset in monetary-policy expectations. The S&P 500 shed 1.1%. The tech-focused Nasdaq Composite Index also lost 1.1% and the Dow Jones Industrial Average retreated 1%.  

Fresh data showing a tight U.S. labor market spelled trouble for stocks, with investors believing upbeat economic readings could embolden the Fed to continue with big interest-rate increases. “Those strong job numbers do point to the likelihood of ongoing Fed aggressiveness and hawkishness, ” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.



Gold futures marked a third straight decline, settling at their lowest in more than a month. Prices for gold fell to near the session’s lows shortly after data showing that a survey of U.S. consumer confidence rose in August for the first time in four months. December gold was off 0.8% to $1,736.30 per ounce.


Oil Futures

Oil futures dropped by more than 5%, with worries over the economic outlook and energy demand, along with news reports that helped to ease concerns over tight supplies, sending prices to their lowest finish in more than a week. West Texas Intermediate crude for October delivery fell 5.5% to settle at $91.64 a barrel on the New York Mercantile Exchange. October Brent crude, the global benchmark, also lost 5.5% at $99.31 a barrel on ICE Futures Europe.  

A source in one of the OPEC+ delegations told Russian news agency TASS that the Organization of the Petroleum Exporting Countries and their allies are not currently discussing the possibility of oil production cuts. Also weighing on oil prices, according to Flynn is a tweet from Iran International which said that Iran and the U.S. have reached an agreement on the revival of the Iran nuclear deal.



Major currencies were generally weaker against the US dollar in European and US trade. The Euro rose from lows near US$0.9980 to highs near US$1.0055 and was near US$1.0020 at the US close. The Aussie dollar fell from highs near US69.55 cents to lows near US68.45 cents and was near US68.55 cents at the US close. And the Japanese yen eased from 138.00 yen per US dollar to JPY139.05 and ended US trade near JPY138.75.


European Markets

European sharemarkets were mixed on Tuesday. While most sectors fell, banks rose 0.9% as bond yields continued to climb. Also Reuters noted “Fears lingered about a planned three-day halt of
natural gas supplies to Europe by Russian energy company Gazprom via the Nord Stream 1 pipeline which was set to kick off on Wednesday.” After rising 1% earlier in the session, the pan-European STOXX 600 index fell by 0.7%. But while the German Dax index rose by 0.5%, the UK sharemarket fell by 0.9%. Shares in Rio Tinto fell by 3.3% and shares in BHP fell by 4.3%.


Asian Markets

Earlier, in Asia, Japan’s Nikkei Stock Average ended 1.1% higher, recovering from a selloff on Monday sparked by the Fed Chairman Powell’s hawkish comments. Stocks of real-estate developers rose. Among auto stocks, Honda Motor rose 0.8%, Nissan Motor advanced 2.1%, and Toyota Motor gained 0.7%. Chinese stocks finished lower amid prevailing concerns about the country’s economic recovery and companies’ earnings outlook.

The A-share market still faces uncertainties stemming from U.S.-China relations and the property sector downturn, Shanxi Securities said in a note. Coal miners were among top laggards, reversing a recent uptrend. Renewable-energy sectors also weakened. The Shanghai Composite Index fell 0.4%, the Shenzhen Composite Index declined 0.5% and the ChiNext Price Index was 0.7% lower.

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