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Right now the market has been seeing USD seasonal strength to start the year due to some tax-related flows from US corporations(as tends to happen most years). The data out this week for the US has been mixed and the NFP print will be crucial in setting the tone for the USD to end the first week of 2024.
The dollar index has a very interesting turn of the year pattern. Heading into year and the dollar sees pronounced weakness from a seasonal perspective but in contrast, we see dollars strength to start the year from a seasonal perspective.
Platinum has a very strong seasonal pattern to start the year. Over the last 25 years prices have gained over 75% of the time for an average return of 6.02%. The maximum drop in a positive year has been -7.38%, so the technicals look attractive for dip buying platinum if we see a pull back in early January.
The Bank of Japan met this week and failed to signal a clear end to their negative interest rate policy. This allowed the JPY to weaken and lifted the JPY crosses higher. However, the big picture has not changed! The Bank of Japan is still expected to end negative interest rates around the spring of 2024, so that should mean any moves lower in the JPY find dip buyers.
The so called Santa Rally could be alive and well for the UK! Over the last 10 years the FTSE 100 has gained 100% of the time from December 18 through to December 29!
So, is this a chance to get a free gift from the UK’s stock market this year? Time for gains in the FTSE?
Has the Fed just given the green light for gold to gain into the start of 2024? With a dovish dot plot forecasting 3 Fed rate cuts next year bonds were heavily bought last night and the USD was convincingly sold.
The Hang Seng Index (HSI) stands as a free-float market capitalisation-weighted index encompassing the sixty most influential companies trading on the Hong Kong Exchange (HKEx).
Today is the Federal Reserve’s hotly anticipated interest rate meeting. Expectations in short-term interest rate markets are for the Federal Reserve to cut interest rates four times next year. Now this seems a very dovish expectation.
A major risk event is coming up for the US on Tuesday ahead of the Federal Reserve’s interest rate meeting on Wednesday. Although US CPI data is unlikely to change the Fed’s mind for Wednesday it will certainly set the mood and tone.
If you notice you can see that the seasonal pattern becomes very strong after the middle of December. That is not for no reason. The middle of December marks the last Fed meeting, so investors are often confident to take their gold position once the path for US yields and the USD is more predictable with the Fed having finished their last interest rate meeting for the year.
