Quiet End to a Stormy Year
December 31, 2024
The chaotic year of 2024 included wars in Sudan, the Middle East and between Russia and Ukraine, toppled governments in the U.K., Germany, France, the United States and — most unexpectedly — Syria after a half century of brutal Assad-family dictatorship, plus two plane crashes in the year’s final week that epitomized 2024. The year, like most, is ending with a whimper as most markets that opened at all shut down early.
In overnight foreign exchange market action such as it was, the dollar rose 0.4% against the New Zealand dollar and Mexican peso, 0.2% versus the Canadian dollar, Australian dollar and South Korean won, and 0.1% relative to the Swiss franc, Turkish lira and sterling, but edged 0.1% lower relative to the euro.
The weighted DXY dollar index is ending the year near its 2024 high of 108.54 touched earlier this month. The 2024 low of 100.16 was visited roughly three months ago.
The 10-year U.S. Treasury market yield of 4.52% is up a basis point on the day and 64 bps on the year. Among major European economies, the British 10-year gilt yield is roughly a percentage point above its end-2023 level. That’s a much bigger net rise than Germany’s comparable increase of 38 bps, for instance. The 10-year Japanese JGB is about a half percentage point higher than a year ago.
Among the few open stock markets this final day of the year, the Shanghai Composite index in China dropped 1.6% and there were drops of 0.9% in Australia and 0.7% in Taiwan. But the British Ftse and Paris Cac are 0.7% higher today, and key U.S. indices are up around 0.4% in pre-open futures trading.
Prices for Bitcoin, oil and gold show gains of 1.5%, 0.7% and 0.2% so far today.
South Korean consumer price price inflation of 1.9% year-on-year in December exceeded expectations and was up from 1.5% in November and a 45-month low of 1.3% in October. But such was well aligned with the medium-term target of 2.0% and down from a 284-month peak of 6.3% in July 2022.
China’s NBS government-compiled composite purchasing managers index rose 1.4 index points to a 9-month high in December of 52.2 on the strength of faster activity growth in non-manufacturing activities. The manufacturing PMI printed at a 2-month low of 50.1, indicating very meager growth in spite of government policy support but also concern over incoming President-elect Trump’s tariff intentions.
The Central Bank of the Dominican Republic’s policy interest rate was cut by 25 basis points for the fifth time in 2024 on top of 150 basis points of relief provided in 2023. At 5.75%, the new rate level is its lowest since May 2022 and down from an 8.5% peak maintained from October 2023 through May 2023. Dominican consumer price inflation has slowed from 9.6% in September 2022 to 3.2% as of last month.
The U.S. FHFA and Case Shiller monthly house price measures will be released later this morning, and that will pretty much wrap things up. January 1st is the most widely shared market closure around the world.
Happy New Year, Everyone!
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Central bank of the Dominican Republic, South Korean CPI
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