December and 2022 in Figures
December 30, 2022
The primary driving force behind financial market activity in 2022 was the unexpected reality that elevated inflation was not going to be short-lived and self-correcting, which resulted in substantial monetary policy tightening by almost all central banks around the world. Considerable wealth stored in fixed income securities, equities (and the technology sector in particular), and cryptocurrency was destroyed during the year.
A cumulative 425-basis point rise in the federal funds rate target from 0-0.25% to a range of 4.25-4.50% set the tone for many central banks. Countries where policy interest rates climbed in 2022 by less than at the Federal Reserve included Georgia (50 basis points), Taiwan (62.5 bps), Malaysia and Uzbekistan (100 bps), Tunisia and Kenya (175 bps), Rwanda, Indonesia, Vietnam and the euro area (200 bps), South Korea, India, Norway and Switzerland (225 bps), Sweden (250 bps), Namibia (275 bps), Armenia and Australia (300 bps), Israel (315 bps), the U.K. and Czech Republic (325 bps), New Zealand and the Philippines (350 bps), and Serbia and Saudi Arabia (400 bps). The Bank of Japan did not change its 0.10% short-term interest rate at all during the year but surprised markets in its last policy review when the 10-year JGB yield’s allowable daily corridor ceiling was doubled to 0.50%. There were also a few central banks that defied global trends by ending the year with a lower policy rate than the end-2021 level. Leading this group was Turkey whose central bank dropped 500 basis points, Russia with a net decline of 100 bps, Tajikistan (-25 bps) and the People’s Bank of China (-20 bps).
Central banks where policy interest rates increased by even more than the Fed included Brazil (450 bps), Nigeria, Kyrgyztan, Poland, Peru, Romania and Mexico (all 500 bps), Pakistan (625 bps), Kazakhstan and Mozambique (700 bps), Chile (725 bps), Egypt (800 bps), Sri Lanka (950 bps) Hungary (1,060 bps), Ghana (1,250 bps), Moldovia (1,350 bps), Ukraine (1,600 bps) and Argentina (3,700 bps).
The dollar for the most part benefited from the year’s risk aversion, but the U.S. currency’s gains were secured in the first three quarters. The weighted DXY dollar index peaked on September 28, and significant dollar losses were recorded in December in spite of continuing weakness that month in both fixed income securities and equities.
| 10-Yr Yield | 12/30/22 | Chg in Dec | 2022 Change |
| U.S. | 3.87% | +26 Basis Points | +105 Basis Pts |
| Germany | 2.56% | +64 | +237 |
| Japan | 0.40% | +16 | +34 |
| U.K. | 3.66% | +51 | +270 |
| Canada | 3.30% | +37 | +188 |
| Switzerland | 1.54% | +49 | +171 |
| CB Policy Rate | 12/30/22 | Chg in Dec | 2022 Change |
| Fed funds target | 4.25/4.50% | +50 basis points | +425 basis pts |
| ECB refi rate | 2.50% | +50 | +250 |
| BOJ policy rate | -0.10% | 0 | 0 |
| BOE Bank Rate | 3.50% | +50 | +325 |
| Swiss Policy Rate | +1.0% | +50 | +175 |
| FX | 11/30/22 | Dec Chg in $ | 2022 Change |
| EUR/USD | 1.0706 | -2.1% | +6.3% |
| USD/JPY | 131.27 | -1.9% | +14.0% |
| USD/CHF | 0.9246 | -2.3% | +1.3% |
| GBP/USD | 1.2090 | -0.3% | +11.9% |
| AUD/USD | 0.6808 | -0.3% | +6.7% |
| NZD/USD | 0.6348 | -0.8% | +7.8% |
| USD/CAD | 1.3540 | +0.9% | +7.1% |
| USD/CNY | 6.8983 | -2.7% | +8.5% |
| Equities | 12/30/22 | Chg in Dec | 2022 Change |
| S&P 500 | 3840 | -5.9% | -19.4% |
| Nasdaq | 10466 | -8.7% | -33.1% |
| Djia | 33147 | -4.2% | -8.8% |
| Dax | 13924 | -3.3% | -12.3% |
| Nikkei | 26095 | -6.4% | -9.4% |
| Ftse | 7452 | -1.6% | +0.9% |
| Canada TSE | 19392 | -5.3% | -8.6% |
| Swiss SMI | 10729 | -3.6% | -16.7% |
| Commodities | 12/30/22 | Chg in Dec | 2022 Change |
| Oil, $ per barrel | 80.26 | -0.2% | +6.7% |
| Gold, $ per ounce
Bitcoin, $ |
1826.20
16595 |
+2.5%
-3.3% |
-0.1%
-64.1% |
Copyright Larry Greenberg 2022. All rights reserved. No secondary distribution without express permission.
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