Key Financial Variables to Watch in Q1

The first quarter of 2024 will be shaped by three significant factors: U.S. Treasury yields, Bitcoin, and the USD/KRW exchange rate.

Treasury yields are expected to rise further, supported by robust economic performance and inflationary pressures. Manufacturing data, such as the PMI reaching 49.3, has already intensified these concerns. The release of December’s Consumer Price Index (CPI) on January 15 will be a key event, while President Trump’s policies following his inauguration on January 20 could introduce additional yield volatility.

Bitcoin, which increased by approximately 140% in 2023 to reach KRW 141,320,000 by year-end, has become an influential market indicator. Its price has been driven by ample global liquidity and growing interest in cryptocurrencies. However, Bitcoin remains highly sensitive to Federal Reserve policies. Any contraction in liquidity could result in a sharp correction, potentially affecting broader markets, including the technology sector.

The USD/KRW exchange rate recently reached KRW 1,471, approaching the critical KRW 1,500 level amid heightened economic uncertainty. A stabilization could occur if domestic political risks are resolved, potentially attracting foreign investment and supporting a recovery in South Korea’s stock market.

While some market turbulence is anticipated, experts maintain a cautiously optimistic outlook for risk assets. They suggest that liquidity-driven conditions, underpinned by stable interest rates and the dollar, could continue to support investor preference for equities and other high-risk assets.

Read More : “Bitcoin Surge Sparks Competition to Launch ‘Riskier’ Cryptocurrency ETFs”