It was a lively year in the FX market with the yen going on a particularly wild ride but ultimately it was the Swiss franc that came out on top as USD/CHF fell nearly 9%.

At the other end of the spectrum was the Japanese yen as it was the G10 laggard for the third straight year, falling 7.6% in spike of a huge rally over the past six week.s

Right in the middle was AUD/USD, which started the year at 0.6813 and finished the year at 0.6810. That’s a whole three pips for the patient shorts 🙂

We hope you had a more-profitable year than that but overall I’m struck by the small size of most of the moves and the relatively narrow ranges. EUR/USD traded this year entirely between 1.0447 and 1.1275, which is far narrower than the usual 15-20-cent range.

Expanding beyond the G10 group, the Russian ruble had another dismal year while the Mexican peso gained an admirable 13%, in its best performance in more than 30 years.

This article was written by Adam Button at www.forexlive.com.

The major US stock indices could not keep the momentum going and is ending the day and the year with a down day. The declines today, however, were not large enough to close the week lower. As a result, the major indices are ending higher for the 9th consecutive week to end a strong year for US indices.

The closing levels for the day are showing:

• Dow Industrial Average fell -20.58 points or -0.05% or 37689.55
• S&P fell -13.54 points or -0.28% at 4769.82
• Nasdaq fell -83.79 points or -0.56% at 15011.34

The small-capRussell 2000 index fell -31.26 points ro -1.52% at 2027.07.

For the week, the major indices all closed higher for the 9th consecutive weeks:

• Dow rose 0.81%
• S&P index rose 0.32%
• Nasdaq index rose 0.12%.

The Russell 2000 fell -0.33% with the decline today.

For the trading year, the Nasdaq index led the way to the upside, but all three major indices rebounded from sharp declines in 2022.

• Dow rose 13.70% after falling -8.78% in 2022. The Dow industrial average made new all-time highs in 2023 after pushing above the 2022 high at 36952.65.
• S&P index rose 24.23% after falling -19.44% in 2022. The S&P got within 3 points of the all-time high close at 4796.57. The high for the year was reached this week at 4793.30 but could not extend to a new record close. .
• Nasdaq index rose 43.42%, the largest gain since 43.64% in 2020. The gain over 43% is the 3rd where the Nasdaq rose between 43% and 44% since 2009. In 2010, the index rose 16.9%. IN 2021, the following year saw a gain of 21.39%

The Russell 2000 rose 15.09% thanks to a strong gain starting in mid-November.

In 2023, the so-called „Magnificent 7“ were grouped, named and became the major influence to the gains seen this year Those stocks consisted of Nvidia, Meta, Apple, Alphabet, Microsoft, Amazon and Tesla. Each of those stocks experienced oversized gains for the year led by Nvidia.

• Nvidia, 238.87%
• Meta, 194.13%
• Apple, 48.22%
• Alphabet, 58.32%
• Microsoft, 56.80%
• Amazon, 80.95%
• Tesla, 101.72%

Other big gainers for the year included:

• Palantir +167.29%
• Uber, +148.97%
• Crowdstrike, 142.49%
• Shopify, 124.37%
• Palo Alto Networks, 111.32%

Some losers this year included:

• AMC, -82.96%
• Raytheon, -46.77%
• Moderna, -44.63%
• Pfizer, -43.81%
• Chewy, -36.27%

Looking at the 11 sectors of the S&P index, the Information Technology sector led the way with a gain of 56.39%. The Utilities and Energy were the worst performers in 2023. As a point of comparison, in 2022, Energy and Utilities were the best performing sectors, while Communications and Discretionary were the worst performers:

This article was written by Greg Michalowski at www.forexlive.com.

The global asset that dominated the conversation in much of 2023 and particularly in Q4 was the 10-year Treasury note. However after a tumultuous year, it finishes nearly unchanged.

The 10-year closed 2022 at 3.83% and it closes today at 3.87%. In the meantime it fell as low as 3.25% on the spring regional US banking crisis and as high as 5.02% on the October debt rout.

The yearly chart paints a doji star, which is an indication of further volatility ahead.

Other changes on the bond curve:

• Two year yields down 11.3 bps on the year
• 30-year yields up 9 bps on the year

This article was written by Adam Button at www.forexlive.com.

Someone has a Canadian dollar order that needs to be filled before the turn of the year.

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.

At this time last year, everyone was fretting about a 2023 recession. That’s the kind of setup that led to a 55% rally in the Nasdaq (with some help from AI) and a 24% rally in the S&P 500.

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:

• Q4 2022: CHF 27.3 billion
• Q1 2023: CHF 32.3 billion
• Q2 2023: CHF 40.3 billion (largest amount since statistics began in 2020)
• Q3 2023: CHF 37.6 billion (~$45 billion)

This article was written by Justin Low at www.forexlive.com.

• Prior 96.7; revised to 97.2

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.

• Prior +3.2%

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.

• Prior +0.2%

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.