Markets to Start the New Year on the Front Foot
Global Financial markets kick off the new year today in positive mood after a stellar run over the last few months for equities, led by the US indices. Although experiencing a slight drop on the last couple of trading days of 2023, the Dow just off flat, the S&P down 0.28% and the Nasdaq losing 0.56%, all three major indexes posted another winning week to make it nine in a row. US treasury yields finished the day close to flat as well and many will be surprised that it is a similar story on the year after some wild swings and the dollar gained slightly on the day although locked in a 2% loss for the year. Investors are now looking ahead at the first trading day of the year for more positive momentum to keep the good times rolling.
Dollar Under Pressure as we Hit 2024
The US dollar has had a tough time over the last few months against most of its contemporaries as the long-awaited Fed pivot came at last. Over the course of the year the greenback is only down 2% on the index but it experienced a fair amount of volatility in that time span. Traders now enter the new year looking to see if this momentum will continue and we see fresh ranges hit the majors. Interest rate differentials, and therefore central banks will as usual, take a pivotal role in the longer-term trends and dollar bears will need to see the Fed come good on the anticipated rate cuts that are priced in, and for that to happen data will have to keep coming in showing that inflation is under control. Short term, traders will be looking to sell the dollar on technical levels, but many experienced heads see a few more twists and turns for the greenback in the next 12 months and January’s key data prints will give us a good heads up on new direction for this year and Friday’s non-Farms will be the first test.
Quiet Calendar Start to the Trading Year
Global markets kick 2024 off in earnest today and it looks set to be a relatively smooth start to the year with mainly second tier data releases on the horizon, although this changes swiftly as the week progresses. The first potential market moving data of the year comes out of China midway through the Asian session with the release of the latest Caixin Manufacturing PMI data and this is followed by a raft of Final Manufacturing PMI numbers across Europe and North America later in the day. The US session has little in the way of market moving data today but that changes tomorrow and traders will be looking closely for the first moves of the year once Wall St opens with many looking for more topside potential for the crucial US indices.
