Swiss National Bank Suffered Losses of 3 Billion Francs in 2023

The Swiss National Bank (SNB) reported an annual loss of 3 billion Swiss francs (USD 3.54 billion) in 2023 and said it would not make payments to Switzerland's central or local government or pay dividends to investors.

 U.S. Small Business Optimism Improved Moderately at End of 2023

NFIB's Small Business Optimism Index rose 1.3 points to 91.9 in December, coming in above market expectations for a modest increase. Despite the increase, the index was still 6 points below its historical average of 98 points.

Canada's Trade Accounts Register a $1.6 Billion Surplus in November

Canada’s merchandise trade surplus notched its fourth consecutive month in black ink. However, November's surplus narrowed to $1.6 billion as imports rose and exports edged lower. This comes after October's surplus was revised upward to $3.2 billion.

Sunset Market Commentary

Economic data were few today. Still core bond yields continued the bottoming out process that started last week, with Europe this time taking the lead. German yields are rising between 5-6 bps across the curve. Supply obviously was the name of the game today. According to Bloomberg analyses, a record of at least (probably more) than €43 bln of bonds (financials corporates and government related paper) was to be priced today.

Australia: Inflation Continues to Moderate in November

Australia. The Monthly CPI Indicator rose 4.3% in the year to November, down from 4.9%yr in October and a recent peak of 8.4%yr in December 2022. The November print was a touch softer than Westpac’s forecast and the market’s median forecast of 4.4%yr. At face value the November Monthly CPI Indicator suggests that if there are any risks to our current December quarter CPI forecast of 0.8%qtr it is very slightly to the downside.

Focus Turns to Scandinavia

Today is a light day on the international data front, but we get a lot of Nordic data. In Denmark, we get CPI inflation for December 2023. We expect to see that inflation has continued to climb higher to 1.1% y/y, due to base effects from December 2022's decline in fuel and electricity prices. We expect the underlying price pressure to remain low, as it has for the last 3-4 months.

Weakest Growth Since 1990s

The World Bank said yesterday that it expects growth to fall to 2.2% for the period that includes 2020 and 2024 and that’s the slowest 5-year period since 1990-1994. The slowing global growth expectations somehow keep the global yields subdued, but at 4% yield, the US 10-year bond is expensive and may not have much upside potential left unless fresh data points at softening activity, and ideally a further weakness in consumer prices.

Weak JPY Following Disappointing (But Outdated) November Labor Earnings Data

Other moves in FX include a weak JPY following disappointing (but outdated) November labor earnings data. The BoJ’s window of opportunity to ditch negative policy rates is closing rapidly. USD/JPY is testing the 145 big figure and equities in the country (up to +2%) greatly outperform regional peers. The Aussie dollar appreciates even as inflation eased slightly more than expected from 4.9% to 4.3% in November.

Inflation in Australia Continues To Decline. AUD/USD Tests Important Support

Data today from the Australian Bureau of Statistics on Wednesday showed the monthly consumer price index (CPI) rose 4.3% year-on-year in November, the slowest pace since January 2022. Value a month earlier = 4.9%. Market forecasts = 4.4%.

Australian Dollar Rises After CPI Falls

Australia’s CPI for November rose 4.3% y/y, down considerably from 4.9% in October and just shy of the market estimate of 4.4%. This marked the lowest reading since January 2022. A key measure of core inflation, the trimmed mean, climbed 4.6% compared to 5.3% in November.