Happy New Year! 2024 ended with a late surge for the US Dollar, but most other markets were relatively quiet. Risk assets remain bullish, but the consensus is that this will end in 2025—will it prove right?

The US Dollarsaw buying flows into year-end, and this caused the greenback to close the year with another positive week, even though data (such as Chicago PMI) continued to disappoint. Last week, the DXY index rallied 0.8% to close at 108.922.

The Euro and Sterling lost ground against most major currencies as PMI continued to disappoint. The EURUSD traded below 1.03 for the first time since November 2022, closing the week over 1% lower at 1.0308.

Commodity currencies managed to hold their ground even as the Dollar strengthened. Last week, the AUD, NZD, CAD and NOK posted very marginal moves. Elsewhere in FX, the JPY gained 0.3%, and the CHF fell 0.8%.

Oil had a second strong week, putting some distance from the major support zone below. Last week, WTI rallied over 5% to close at the $74 level.

Precious metals started the year positively despite the rallying Dollar. Gold is still very close to its all-time highs and will likely have another good year. Silver is still underperforming, with the Gold/Silver ratio just below 90. Last week, Gold and Silver rallied around 0.7%, closing at $2,640 and $29.61, respectively.

Bonds reversed some of last week’s losses, posting gains to start the year. The 10y UST yield fell 3bps to close at 4.60%, and the 10y Bund was marginally lower at 132.476.

Equities remain in a bullish technical trend, even though they posted a negative week to start 2025. The S&P500 fell 0.6% to close at 5936, and the DAX fell 0.4% to close at 19906 points. Valuations are now well into bubble territory, but there is still no technical evidence that we are near the top.

Finally, crypto-currencies have rallied off last week’s lows and look positive once again. At the time of writing, Bitcoin was up 3% at $98,000, and Ethereum was up 5% at $3,590.

The Week Ahead:

The new year starts with a busy week! We have more PMI data coming up, inflation prints from Norway, Switzerland and the Eurozone, and we end the week with the US Nonfarm Payrolls.

Market Commentary: This communication is for informational purposes only. It is not intended as an offer or solicitation to purchase or sell any financial instrument. All market prices, data, and other information are not warranted as complete or accurate and are subject to change without notice. Any comments or statements made herein do not necessarily reflect those of Coeus Capital. Coeus Capital does not assume any liability whatsoever for the content of this newsletter or make any representations or warranties as to the accuracy and completeness of any information contained in this newsletter.