Bitcoin led the charge — crossing the 20,000 USD mark —- as cryptocurrency prices surged over the last week, raising expectations of another bull run.
Forex
The EUR/USD pair achieved its highest level since May 31, 2022 as the US dollar continued its slide. The euro climbed up to 1.0780 USD on Thursday, 12 January, before slowing down the next day as the US dollar recovered on the back of the Consumer Price Index (CPI) data. Inflation slowed down in December 2022, raising expectations of a 25 basis points hike by the US Federal Reserve in February.
The British pound mounted a surge of its own as the GBP/USD pair reached a 4-week high at 1.2240 USD. The GBP traded just above 1.2200 USD on Friday, 13 January. following the better-than-expected gross domestic data (GDP) in the United Kingdom.
Meanwhile, the Japanese yen continued its bull run on the back of softening inflation in the US and expectations of an aggressive stance by the Bank of Japan.
The events calendar this week will see the release of the Initial Jobless Claims data (which measures the number of individuals who filed for unemployment insurance over the past week) and the Producer Price Index (PPI) data (which measures the change in the price of goods sold by manufacturers) on Wednesday, 18 January.
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Commodities
Gold prices finished their fourth straight week in positive territory after climbing over the 1,900 USD mark on Thursday, 12 January, for the first time in 7 months. The upward price movement was driven by the selling pressure on the US dollar following the release of the core inflation data in the United States.
China is scheduled to release its fourth quarter GDP data on Tuesday, 17 January. Growth in GDP will help push gold prices higher as China is the largest consumer of gold in the world. On the other hand, the effects of a negative GDP print — which is likely owing to Covid-19 disruptions in China — is expected to be short-lived.
Oil prices ended the last week on their biggest weekly gain since October 2022, riding on a weak US dollar and expectations of an increase in demand from China — the world’s largest oil importer. China’s industrial production is starting to ramp up as the coronavirus scare in the country has subdued.
The Organization of the Petroleum Exporting Countries, or OPEC, is scheduled to release its monthly report on Tuesday, 17 January.
Cryptocurrencies
The cryptocurrencies market continued its upward trend from last week and traded higher after the US CPI data showed signs of cooling down in inflation. The surge lifted the global cryptocurrency market capitalisation above 975 billion USD on Sunday, 15 January. It marks a considerable improvement from the 850 billion USD mark it was at last week, a level it has struggled to reach since the November 2022 implosion at Futures Exchange (commonly known as FTX — a leading cryptocurrency exchange) before its bankruptcy.
During its ongoing bankruptcy proceedings, an attorney for FTX told a US court on Wednesday, 11 January, that it has recovered more than 5 billion USD in liquid assets but the extent of losses suffered by its customers in the collapse of the cryptocurrency exchange is still unknown.
Bitcoin, the world’s largest cryptocurrency, is showing early signs of another bull run as it broke the 20,000 USD resistance on Saturday, 14 January. Before the recent breakout, the price of Bitcoin had been trapped in a small range between 16,000 USD and 17,000 USD for weeks. The token was trading at 20,863.60 USD at the time of writing. On the other hand, Ethereum, the second largest digital currency by market capitalisation, was trading at 1,551.64 USD on Sunday, 15 January.
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US stock markets
| Name of the index | Friday’s close | *Net change | *Net change (%) |
| Dow Jones Industrial Avg (Wall Street 30) | 34,302.61 | 672.00 | 2.00% |
| Nasdaq (US Tech 100) | 11,541.48 | 501.13 | 4.54% |
| S&P 500 (US 500) | 3,999.09 | 104.01 | 2.67% |
Source: Bloomberg
*Net change and net change (%) are based on the weekly closing price change from Friday to Friday.
The major US stock indices continued their good performance from the previous week, with the Nasdaq rising by 4.54%, the S&P 500 by 2.67%, and the Dow Jones by 2.00%. The 2 consecutive weeks of upward movement marks a stark contrast from the end of 2022 when the indices finished the year on an extended bear run.
The stock market movement was helped by the alleviation of selling pressure as data by the University of Michigan Surveys of Consumers showed that the US consumers expect an ease in inflation over the next 12 months.
The beginning of the earnings season will be marked by Morgan Stanley and Goldman Sachs releasing their fourth-quarter earnings results on Tuesday, 17 January. Analysts have been predicting a nearly 4% fall in the Q4 for S&P 500 companies. Such an outcome would mark the first year-over-year decline since the third quarter of 2020, according to analysts.
The retail sales data — which is an indicator of consumer spending — will be released on Wednesday, 18 January. The US financial markets will be closed on Monday, 16 January, on account of Martin Luther King Jr. Day.
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