 The onset of 2024 marked a notable shift in global market sentiment. Major U.S. stock indexes ended their nine-week winning streak, closing lower, while major benchmark treasury yields experienced a notable recovery. Concurrently, this shift in market dynamics was accompanied by a scaling back of bets on an immediate rate cut by Fed. Amidst these changes, Dollar concluded broadly higher, though it faced conflicting reactions due to mixed economic data. Looking ahead, extended pullback in risk markets and stabilization in yields could potentially bolster the greenback in the near term. Japanese Yen, on the other hand, ended the week as the worst performer, undoing some of its massive gains from the end of last year. This reversal was primarily driven by the market adjusting its expectations for BoJ policy in the aftermath of the recent devastating earthquake in Japan. Moreover, Yen faced additional pressure due to the rise in treasury yields in other major economies. Australian and New Zealand Dollars also ended the week on a weaker note, affected by broader aversion to risk. Aussie, in particular, was further impacted by extended pullback in Copper prices as well. Elsewhere in the currency markets, Euro ended the week mixed but softened against British Pound, weighed down by lower-than-expected headline inflation reading. The rebound in inflation seemed not as strong as ECB had anticipated. Meanwhile, Sterling was a standout performer among European majors, while Canadian Dollar ranked as the third strongest. Swiss Franc, despite reaching a new record high against Yen, showed a mixed performance overall. |
