6th of April 2021
Domestic Markets | S&P/ASX200 up 4.5pts (0.1%)
CBA up $0.21 (0.2%)
FMG up $0.10 (0.5%)
The ASX200 ended March with its best month since November but stayed in the range its traded in since January. The market was closed on Friday due to the Good Friday holiday, allowing investors to mull over positive market movements and data from the US.
Global Markets | Dow Jones up 80pts (0.2%)
S&P 500 up 45pts (1.1%)
Nasdaq down 341pts (2.6%)
In a shortened trading week, the US markets reacted favourably to US President’s proposed new infrastructure bill, with its expected impact on the US economy only adding to the favourable data already being released. Despite the favourable data, bond yields didn’t react like they have done in recent months, indicating the investors belief that central banks won’t increase interest rates ahead of expectations.
Europe | Euro Stoxx 50 up 30pts (0.8%)
European markets rallied despite a raft of economic data slightly missing expectations, while it also shook off a continued rise in European COVID cases and further national lockdowns. The Euro Stoxx broke above a key resistance level, managing to finish above 3,900 points for three consecutive days.
Asia | HSI, CSI, KOSPI, NIKKEI
All of the Asian majors were up more than 2% this past week, reacting to positive data out of the US. Korean KOSPI and the Japanese Nikkei were open for the full week, serving as a proxy for how global markets responded to American news.
Commodities | Gold fell 3.13USD/oz (0.2%)
Silver fell 0.08USD/oz (0.3%)
Copper fell 0.03USD/lbs (0.8%)
Iron Ore fell 1.50USD/t (0.9%)
Precious Metals | Gold, Silver
Precious metals reached a three-week low as a strong US dollar and modest rises in US Treasury yields saw the lustre of precious metals during the middle of the week. Strong economic data towards the end of the week however increased the prospects of inflation rises, which saw precious metals rise back towards prices seen at the start of the week.
Oil | WTI Crude, Brent
Oil prices benefitted from a shortened trading week with Brent Crude and WTI Crude prices not able to react to negative sentiment. While OPEC+ decided to reduce current production cuts by 2 million barrels per day, which is normally a bullish indicator, investors quickly reversed their position on the announcement when it was revealed that the production increase was mostly due to a compromise rather than any fundamentally stronger view of the oil market. With COVID cases rising in key markets, demand can be expected to stay low for an extended period of time.
Iron ore reversed its recent declining pattern, with heavy rainfall in Brazil causing iron giant Vale to miss production targets for the first quarter of 2021. Despite this, questions regarding Chinese demand for iron ore still remains, given new climate policies which have been implemented in large steel producing cities, with a number of brokers decreasing their 2021 forecasts for the price of iron ore.
Joe Biden’s stimulus bill gave copper prices a boost, given the use of copper in many of the projects that Biden is targeting – both in terms of the traditional transport infrastructure, but also in terms of the new green energy projects that Biden promised as part of his election campaign. On the supply side. Codelco, a mining titan in Chile, which is the worlds top copper producer, agreed a deal with workers at one of its mines, which should see the stop-start strikes which halted production come to an end.