The release of inflation data and the subsequent decision to raise interest rates by 50 points in both America and Europe had a significant impact on the performance of stock and bond indexes.

The impact was particularly noticeable in European markets, which closed with negative five-day returns. The week was also down for metals, meats and some soft commodities. Excellent returns, however, for the energy market.

To learn more about how the markets are moving and the volatility trend, don't miss our weekly overview!

Enjoy the video! 😎

Transcription

Hey everyone and welcome back! One of the coaches at Unger Academy here, and this is the usual chat that we have every single week on the weekends about the market trends.

Okay, so this week was full of macro events. I'm referring to the Central banks' decision to raise interest rates by 50 points in both America and Europe following a slowdown in inflation, which was announced on Wednesday and was initially received positively by the markets.

I mean, we can see that the market has had a strong bullish day but later surrendered all the gains.

Indeed, we are now at -2.20% as far as the Nasdaq is concerned.

A -1.68% for the Mini SP 500.

The situation is even worse in the European stock markets, which, according to the ECB, still have to factor in a sustained interest rate increase in contrast to the U.S. stock markets, for which there are signs that this rate increase is coming to an end.

And that's basically the main reason for this difference in performance.

As for the bond market, we have the T-bond holding at +0.40% this week.

There’s a bullish trend at the moment, and I think it’s fair to say that there’s been a turnaround in U.S. bonds.

It isn’t the case with the European bonds though, for the same reasons I mentioned earlier.

Especially for the Bund, which is down almost -2.5% this week.

On the other hand, the energy market is very strong, especially Heating Oil which is up almost +13%.

Look at that, +4% for Crude Oil, +2.87% for Gasoline, and +3.74% for Natural Gas.

On to Metals, we see only negative returns this week.

The one that loses the least is Silver, -1.80%, which is undoubtedly the best performing of all the metals recently.

A 3-month gain of +20% for Silver.

On to Livestock, we have negative returns again everywhere.

Especially for Lean Hogs.

And in soft commodities, we see mixed returns instead.

Coffee, in particular, is gaining +7.46%.

It was still near the lows of the period.

And I’d say a little more. Orange juice is losing 3.13%.

But we know that Orange Juice had reached new all-time highs last week.

Alright, let's switch to the Grains markets.

Take a look here. We have a +4.88% increase in Bean Oil, which was already near the lows, and a +3% increase in Wheat.

Let's turn over to currencies, here we have a Euro-Dollar that’s rising again.

We’re at the 1.0712 level, so an excellent recovery for the Euro.

In other currency pairs, though, the U.S. Dollar remains stronger and stronger.

And, finally, Bitcoin, which is unchanged this week.

It seems to have attempted some recovery from previous levels but was pushed back when it reached the edge of the previous trading range.

As we all know, not exactly reassuring news is weighing on this market, such as possible problems on the Binance exchange.

We know that it is under investigation in America for alleged money laundering.

Then there are rumors that the Proof of reserve provided isn’t entirely satisfactory, and that is certainly weighing on the whole cryptocurrency market, which is still very weak.

Okay, let's go and take a look at the volatility trend in the stock indexes.

We see an increase in volatility in the short term, especially in the EuroStoxx.

I'm referring, of course, to these last few bars that have driven historical volatility up sharply for EuroStoxx and the Dax.

In the U.S. stock markets, on the other hand, volatility is decreasing even in the short run and, luckily, also in the long term.

Let's also take a look at the implied volatility term structure, which is currently in full contango while the VIX is near its lows.

So, despite its recent downtrend, things remain pretty calm in the volatility markets at the moment a sign that traders haven’t yet reached certain levels of concern so no further market disruptions are expected at the moment.

Let’s turn to the rollover schedule for next week.

We have only two rollovers next week: Natural Gas and Orange Juice on December 23.

Finally, guys, here’s a tip for those interested in systematic trading. We have an interesting resource for you.

If you click on the link in the description, you can access a free presentation by Andrea Unger, the only four-time World Trading Champion in real-money trading, who will introduce you to his trading method.

In addition, you can sign up for a free strategic consultation with one of our tutors or go and get the best seller "The Unger Method,” by covering only the shipping costs. So, please, take advantage of it!

With that guys that's it for today!

If you enjoyed the video, please leave us a Like and remember to subscribe to our channel and click on the notification bell, if you haven't done it yet, of course.

And that is it for this week, thank you so much for watching. Have a great weekend. Bye bye!

NEXT UP ON THE BLOG

World Cup Award Ceremony

Interviews

Read More...

---

Robbins-PFGBEST World Cup Trading Championship Awards Presentation at CME Group

Interviews

Read More...

---

On forex markets - Dukascopy

Interviews

Read More...

---