Weekly Market Update: Inflation Data Boosts Stock and Bond Indexes, Bitcoin Finally Recovering?

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The release of U.S. inflation data, which was in line with expectations, helped boost stock and bond indexes in both Europe and America.

Positive weekly returns also for the energy sector, except for Natural Gas, which continues to move downwards.
A positive week also for Bitcoin, which closes with a return of over 12% after a long bearish period with relatively low volatility.

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

Enjoy the video!


Hey everyone, and welcome back!

One of the coaches at Unger Academy here, and as always, today we're going to be taking a look at the performance of the markets over the last week.

Okay, so it was a positive week for the leading U.S. and European stock markets, partly after the release of inflation data that met the expectations on employment data, indicating a possible slowdown in the rise of interest rates by the Central banks.

So, let's take a look. +3% for the Nasdaq. +1.47% at the moment for the Mini SP 500. +2.90% for EuroStoxx and +3% for the Dax.

So, definitely a week of recovery, and this recovery wasn’t limited to the stock market.

We saw it in the bond market as well. We know how much Central bank decisions influence this market as well, and actually, we also saw an uptrend for the 30-year U.S. bonds at +1%, the 10-year bond registered a +0.82%, and also the Bund a +0.85%.

In energy commodities, we see a nice increase in Gasoline at approximately +10.5% at the moment, and other oil derivatives, so Heating Oil and Crude Oil, which is at +6.84%.

Poorly, on the other hand, Natural Gas, which also falls this week. It has been in a solid downward trend for several months now, which in itself isn’t a bad thing, especially given the situation that people are experiencing in Europe.

As for the metals sector, we don't see anything that's particularly interesting. We see only Copper gaining +6.5%, a nice increase over the last few days. -3% for Platinum.

Not too much to report on the meats and livestock market. -2.46% for Lean Hogs at the moment. It has been in a bearish trend for a couple of weeks. And yeah, little else.

On to soft commodities, where again, there are no interesting movements either. We see some mixed returns. For example, Sugar is up by +2.79% while Coffee continues to fall. This commodity has also been in a downtrend for several months. Other than that, I wouldn’t dwell on anything else in this sector.

As for Grains, we see Corn gaining +2.94% and here as well not much else to report.

On the other hand, what is interesting to study is the sector of currencies and cryptocurrencies.

Because here we see some substantial rises against the US Dollar, especially the Yen.
The Euro-US Dollar has gained +1.38% this week and is currently at 1.0841.

But most importantly, turning to the cryptocurrency sector, we see Bitcoin finally making a move. Up +12%, 12.5% to be exact. That's a move we haven't seen in a long time. Last week, we mentioned that it's been several weeks since we've seen a double-digit Bitcoin movement. And well, here it is.

Bitcoin seems to be trying to start an upside reaction. It hasn't really broken through the initial resistance yet but let's see if it can hold this level and continue its run.

Let's also take a look at volatility. We see some stability in volatility, except for the EuroStoxx over a long-term time horizon, which is clearly higher.

The Nasdaq, in particular, has a very low level of historical volatility compared to the past. On the other hand, in the short term, we see a mixed picture.
The Dax has experienced very high volatility compared to the last month.
In contrast, other underlying assets such as the Mini SP 500 show very low historical volatility instead.

Finally, in terms of the implied volatility term structure, we see that the volatility term structure of index futures on the SP 500 is in full contango. So, it’s a picture of a market that, let's say, is free of any kind of disruption for now.

Most importantly, volatility is at an all-time low, at least in terms of 2022 values. So, at the moment, there are no concerns among traders about the immediate performance of stock prices.

Let's turn now to the Rollover Calendar scheduled for next week.
It starts on January 17 with the rollover on Crude Oil futures.
And then Heating Oil and Gasoline will follow on the 20th.

Before we say goodbye though I’d like to give you some advice. If there is anyone among you who's interested in systematic trading, I recommend that you go and take a look at the link in the description of this video. There you can watch 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, the Unger Method.

Not only that, but you can also get the best seller "The Unger Method" by covering only the shipping costs, or you can even book a free strategy call with one of our tutors. Go and click that link!

And with that, guys, that's all for today!

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Thank you so much for watching and we'll see you next week! Bye bye for now!

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Francesco Placci

Francesco Placci

Hi, I'm Francesco Placci, a professional trader since 2005 thanks to the systematic approach to the markets.

My skills range from trading on index futures to bonds, from stocks to commodities, with a particular focus on volatility and options, which I consider to be among the most versatile and fascinating instruments available to traders.

After an experience with leading Italian credit institutions where I learned the basics of institutional finance, I became a successful independent trader, with great personal satisfaction.

Founder of Algoritmica.pro, in 2019 I joined Unger Academy as head of Research and Development.