The loonie is soaring today on steady bids despite a deterioration in risk sentiment. There’s no data out of Canada and the oil market isn’t doing much today so this is purely a flow-driven move. We’re seeing some other ones as well, which is what you would expect at this time of year.
This article was written by Adam Button at www.forexlive.com.
How does the market feel going into 2024?
Recession calls have disappeared, stocks are up nine weeks in a row and there’s the Fear & Greed Index.
My base case is that we see rotation from megacap tech into broader indexes or value early in the year but there’s a compelling case that there are trillions of dollars on the sidelines that will flow into stocks in 2024.
‚Extreme greed‘ is never a good sign but there has been an extreme change in the fundamentals, with yields dropping, the Fed signalling a pivot and inflation looking like it’s dead.
This article was written by Adam Button at www.forexlive.com.
The SNB has been active in bolstering the Swiss franc in the first three quarters of the year, as they are trying to dampen the impact of imported inflation to the economy. Here’s a look at their recent forex sales in the last few quarters:
This article was written by Justin Low at www.forexlive.com.
That’s a slight improvement to Swiss economic prospects but overall levels remain rather tepid at best, hinting that the outlook remains rather uncertain heading into next year.
This article was written by Justin Low at www.forexlive.com.
The added good news here is that core annual inflation is seen easing further to 3.8%, down from 4.5% in November. However, headline annual inflation appears to be sticking around just above 3% after a brief dip below 2% in June.
This article was written by Justin Low at www.forexlive.com.
Xinhua news agency is reporting that the start date to the annual meeting will be on 5 March and this usually will go on for nearly two weeks. The sessions are used to discuss key legislative matters involving the economy and social issues, with voting for new laws also set to take place.
This article was written by Justin Low at www.forexlive.com.
Over the course of the year, UK house prices fell by 1.8% and that is arguably much less hurtful than anticipated considering the rate hikes by the BOE. The average price of a dwelling is seen at £257,443 to end the year. Nationwide does note that a rebound next year „appears unlikely“ though as they say that „consumer confidence remains weak and surveyors continue to report subdued levels of new buyer enquiries“.
This article was written by Justin Low at www.forexlive.com.
In the first week of December, it looked like gold was set for a bit of a reality check after the rally above $2,100 fizzled rather quickly. That saw price dip back below $2,000 but gold bugs have definitely salvaged the situation in a push to a record high close this week. Thinner liquidity conditions may still cast some doubts over the latest move higher but there are points to argue for gold to chase a further move higher heading into next year.
And the seasonal tailwind in January is arguably one of the strongest points there could be in advocating for an extension higher.
Amid lighter trading this week, gold is now at $2,077 and posted a record daily close in trading yesterday. It might be tough to look too much into the moves at the moment but there is definitely a feeling that gold bugs are getting a little too anxious in trying to drag the precious metal past the $2,100 mark and to new heights at this point.
The way I see it, gold is poised for one of two things now. It is either we go off to the races to start the new year i.e. fresh record highs, or we get a notable squeeze lower before buyers reload on long positions. It would really surprise me if we got a quiet and slow January, all things considered.
As for the hesitancy to say which is more likely, it is to do with the fact that I heavily detest reading too much into year-end and thin liquidity moves such as what we’re seeing this week. As such, I still do hold some reservations about the high points for gold on the week currently.
This article was written by Justin Low at www.forexlive.com.
It’s all just more pushback by the ECB as they are not quite ready to pivot just yet. But we all know that rate cuts might be coming sooner rather than later if things stay on trend in the months ahead.
This article was written by Justin Low at www.forexlive.com.
The dollar’s own vulnerabilities this week is also contributing to the drop in the pair but so far in trading today, it is more about the Japanese yen. The pair is now down to 140.87 with the yen up 0.7% against the dollar. Other major currencies are not doing a whole lot in comparison for the most part.
The drop here sees USD/JPY now at its lowest since the end of July and may look towards a test of 140.00 as sellers exert further control.
As for the outlook going into next year, I shared some thoughts earlier this week: The Japanese yen is an early contender for the most interesting major currency in 2024
This article was written by Justin Low at www.forexlive.com.