January 2023 in Figures
January 31, 2023
The Bank of Canada was the only Group of Seven central bank to change its policy interest rate during January, but many others engineered adjustments during the month. Like the Bank of Canada, central banks in Israel, those in Romania, Israel, Serbia, Peru, South Korea, Indonesia, Thailand, and South Africa enacted rate hikes of 25 basis points, while monetary authorities in Pakistan, Nigeria and Ghana lifted their interest rate benchmarks by a whole percentage point. Marching to a different drum, the National Bank of Belarus cut its policy rate by 50 basis points.
Broad dollar gains in the first month of 2022 had foreshadowed an appreciating trend that persisted past mid-summer. In contrast, the dollar depreciated during January 2023 against all the currencies in the table below.
In a similar comparison of the two successive Januaries, ten-year sovereign debt yields climbed in the first month of 2022 but, despite much higher inflation rates now than then, fell just as sharply in January 2023. Inflation was heating up a year ago but has now begun to subside, and investors believe that most of the dose of monetary restraint has been delivered by now. The maverick in the fight against inflation continues to be the Bank of Japan, whose officials have retained a negative 0.1% short-term interest rate. At 4.4% in January, Tokyo CPI inflation reached its highest level in over 41 and a half years. BOJ Governor Kuroda’s scheduled retirement in early April may provide a good opportunity to allow longer-term Japanese interest rates to rise further. As it is, the 10-year Japanese JGB yield closed out the month just two basis points beneath its target daily ceiling.
In yet another directional shift from the January 2022 performance, equity markets experienced strong gains during January 2023. But this followed a difficult December, and opinions remain rather diverse on the subject of how stock markets are likely to evolve this year.
The realm of crypto performed extremely well in January. Gold enjoyed a well-bid month, too, while oil dipped slightly on balance.
| 10-Yr Yield | 12/30/22 | 01/31/23 | Change in Jan |
| U.S. | 3.87% | 3.51% | -36 Basis Pts |
| Germany | 2.56% | 2.28% | -28 |
| Japan | 0.40% | 0.48% | +8 |
| U.K. | 3.66% | 3.33% | -33 |
| Canada | 3.30% | 2.92% | -38 |
| Switzerland | 1.54% | 1.21% | -33 |
| CB Policy Rate | 12/30/22 | 01/31/23 | Change in Jan |
| Fed funds target | 4.25/4.50% | 4.25/4.50% | 0 basis points |
| ECB refi rate | 2.50% | 2.50% | 0 |
| BOJ policy rate | -0.10% | 0 | 0 |
| BOE Bank Rate | 3.50% | 3.50% | 0 |
| Swiss Policy Rate | 1.0% | 1.00% | 0 |
| FX | 12/30/22 | 01/31/23 | Chg in Dollar |
| EUR/USD | 1.0706 | 1.0867 | -1.5% |
| USD/JPY | 131.27 | 130.15 | -0.9% |
| USD/CHF | 0.9246 | 0.9156 | -1.0% |
| GBP/USD | 1.2090 | 1.2325 | -1.9% |
| AUD/USD | 0.6808 | 0.7057 | -3.5% |
| NZD/USD | 0.6348 | 0.6465 | -1.8% |
| USD/CAD | 1.3540 | 1.3304 | -1.7% |
| USD/CNY | 6.8983 | 6.7547 | -2.1% |
| Equities | 12/30/22 | 01/31/23 | Change in Jan |
| S&P 500 | 3840 | 4077 | +6.2% |
| Nasdaq | 10466 | 11585 | +6.9% |
| Djia | 33147 | 34086 | +2.8% |
| Dax | 13924 | 15128 | +8.6% |
| Nikkei | 26095 | 27327 | +4.7% |
| Ftse | 7452 | 7772 | +4.3% |
| Canada TSE | 19392 | 20772 | +7.1% |
| Swiss SMI | 10729 | 11286 | +5.2% |
| Commodities | 12/30/22 | 01/31/23 | Change in Jan |
| Oil, $ per barrel | 80.26 | 78.87 | -1.7% |
| Gold, $ per ounce
Bitcoin, $ |
1826.20
16595 |
1945.30
22953 |
+6.5%
+38.3% |
Copyright Larry Greenberg 2023. All rights reserved. No secondary distribution without express permission.
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