Domestic Markets | S&P/ASX200 down 58pts (0.8%)
CBA up $2.68 (2.9%)
FMG down $1.05 (4.4%)
Australian markets finished the week 0.8% lower as investors steered away from growth stocks in favor of cyclicals. Tech was the biggest drag on the local market, falling by more than 6% as US inflation rose its highest since 2009. While the ASX 200 fell below the 7,000 mark during the week, it rallied on Friday to close above that point.
Global Markets | Dow Jones down 374pts (1.1%)
S&P 500 down 55pts (1.3%)
Nasdaq down 262pts (1.9%)
In the first half of the week, US majors were awash with red after higher-than-expected inflation fueled concerns that the US economy is overheating. Speculation of an earlier than expected rate hike and a potential tapering of the FED’s bond-buying program before year’s end led to a drop in US equities and a selloff in US bonds. Friday saw a rally as dovish remarks from FED officials soothed inflationary concerns.
Europe | Euro Stoxx 50 down 14.6pts (0.4%)
European equities ended a roller-coaster week which saw markets decline in the first half of the week as rising US and German inflation sparked speculation of potential rate hikes. The index clawed back losses as central bankers from the US and UK argued price increases would be transitory.
Asia | HSI, CSI, KOSPI, NIKKEI
Asian equities saw a mixed week. Shanghai’s CSI300 climbed 2.2% as foreign investors came back, buying a net 11.7-billion-yuan worth of A-shares. Elsewhere, the Nikkei, HIS and KOSPI retreated off the back of US inflationary concerns.
Commodities | Gold rose $10.71 USD/oz (0.6%)
Silver fell $0.02 USD/oz (0.0%)
Copper fell $0.10 USD/lbs (2.1%)
Iron Ore fell $1.50 USD/t (0.7%)
Precious Metals | Gold, Silver
Precious metals saw a subdued week after gold rallied nearly 0.6% to above $1,840 an ounce, while silver was flat. The rise came amid general dollar weakness and concerns that rising inflation would force central banks to adopt a contractionary monetary stance. However, continued dovish comments from ECB and FED officials and the disappointing retail sales report have since assuaged these concerns. In tandem, the market uncertainty which has seen the VIX revisit March highs and continued accommodative stance by central banks have supported the case for upside in precious metals. Aside from economic headlines, precious metals continue to benefit from safe-haven demand as India, Brazil and Japan continue to be in the grip of a devastating Covid-19 surge.
Oil | WTI Crude, Brent
Brent and WTI Crude experienced a roller coaster week, however finished flat falling 0.06% and 0.05% respectively. Both benchmarks rebounded from a 3% plunge on Thursday to end the week on a high note as shortages due to an outage at the largest US fuel pipeline and falling US inventories fired up the oil bulls. Limiting gains, however, was the supply side, where OPEC started this month with a gradual easing of its oil production curbs, which is expected to supply by an extra 350,000 barrels a day.
Prices of iron ore declined from a record-high of $229 a tonne reached on May 13th after Chinese officials said it would punish steelmakers if they manipulate market prices. Iron prices have been falling since Premier Li pledged to control the commodities surge earlier in the week.
Copper spot prices ended a record rally to trade lower after a surge in US consumer prices prompted a rise in the USD. As such, this has made the greenback-denominated metals more expensive. The pullback is only expected to be temporary, given how crucial copper is in the transition to a carbon-free world and, especially after major producer, Chile, introduced progressive taxes on copper sales from 2024 which are also expected to increase prices.