Bitcoin declined for a third successive week. After crossing the 25,000 USD mark in February, it was trading below 20,000 USD last week.


Forex chart - market report, week 3 Mar 2023

Source: Bloomberg

The EUR/USD pair gained marginally to close out the week at 1.0640 USD as the collapse of the Silicon Valley Bank overshadowed the expectation around the much-awaited inflation data (due on Tuesday, 14 March). This data will also inform the US Federal Reserve’s (Fed) policy rate decision. In his testimony before the Senate last week, Fed chair Jerome Powell struck a hawkish note, raising expectations of an increase in interest rates and longer into the future if inflation isn’t subdued.

Meanwhile, the non-farm payrolls (NFP), which were released on Friday, 10 March, again exceeded expectations after January’s bumper numbers and came in at 311,000 — analysts had predicted it to be around 205,000. The numbers made the case for a stronger performance for the dollar, but the potential boost in the dollar was kept in check by the unemployment rate, which went up to 3.8%.

The GBP/USD pair remained largely flat over the week and closed out at 1.2033 USD. Meanwhile, the USD/JPY pair failed to consolidate above the 137 USD mark and eventually ended the week at 135.80 USD following the release of the NFP data.
This week will see the release of the all-important Consumer Price Inflation (CPI) data, which is due on Tuesday, 14 March. Retail sales data will be released on Wednesday, 15 March, while the Initial Jobless Claims numbers will be out the following day on Thursday, 16 March.

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Gold chart - market report, week 3 Mar 2023

Source: Bloomberg

Gold prices remained bullish to close out the week at 1,867.87 USD. The surge in the price of the yellow metal has been fuelled by the falling US Treasury yields as the markets anticipate a 50 basis point hike in the March meeting of the Federal Open Market Committee (FOMC). Gold prices are inversely correlated to the US Treasury yield: when one goes down the other goes up.

The US Federal Reserve’s and the US Treasury’s intervention in the banking system to soften the impact of the failure of the Silicon Valley Bank further boosted the prices of the yellow metal.

Meanwhile, oil prices registered considerable gains over the week, rising 1% on Friday, 10 March, over the better-than-expected employment numbers. However, expectations of rate hikes by the Fed and other major economies have clouded growth prospects for the crude, and will likely have a stunting effect on oil prices if rate hikes decisions come to pass.

In a move that could likely temper any supply concerns, major oil-producing nations Saudi Arabia and Iran — both members of the Organization of the Petroleum Exporting Countries (OPEC) — resumed their diplomatic relations on the supply side after a series of undisclosed discussions in Beijing. The move comes close on the heels of the Russian decision to reduce its oil output by half a billion barrels a day in March.


Crypto chart - market report, week 3 Mar 2023

Source: Bloomberg

Cryptocurrencies endured a torrid week on the back of crypto-focused Silvergate Bank’s announcement (on Thursday, 9 March) that it would voluntarily liquidate. It joins the lengthening list of cryptocurrency institutions to unravel in the aftermath of the November 2022 implosion of Futures Exchange (commonly known as FTX). Digital coins dipped further on Friday, 10 March, following the news of the collapse of the Silicon Valley Bank.

After 3 consecutive weeks of decline, Bitcoin — the world’s largest cryptocurrency — was trading at 21,996.80 USD, while Ether — the second-most widely traded digital token — was changing hands at 1,576.81 USD at the time of writing. The total value of digital assets was down below the 1 trillion USD mark and stood at 976.192 billion USD on Sunday, 12 March.

In a development that raises the spectre of regulations in the cryptocurrency industry, the New York attorney general labelled Ether a security, bracketing it with assets such as stocks and bonds. The attorney general’s reference was made on Thursday, 9 March, during her lawsuit against KuCoin — one of the biggest cryptocurrency platforms in the US. It triggered a fall in the price of Ether and it hit a 2-month low on Friday, 10 March.

Meanwhile, in the proceedings against FTX founder and CEO Sam Bankman-Fried, who is fighting to stay out of jail, the judge expressed his displeasure about the proposed terms of bail — which includes having an internet-less flip phone and a laptop with limited capability — for the 31-year-old. Bankman-Fried has been charged with stealing billions of dollars from FTX customers. His fraud trial is scheduled for October 2, 2023. While its founder awaits trial, the effects of the implosion of FTX are still being felt by the cryptocurrency industry 4 months after its bankruptcy.

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US stocks

Name of the indexFriday’s close*Net change*Net change (%)
Dow Jones Industrial Avg (Wall Street 30)31,909.64-1,481.33-4.44
Nasdaq (US Tech 100)11,830.28-460.53-3.75
S&P 500 (US 500)3,681.59-184.05-4.55
Source: Bloomberg
*Net change and net change (%) are based on the weekly closing price change from Friday to Friday.

The US stock market took a huge tumble over the course of the last week as each of the 3 major indices — the Dow Jones, Nasdaq, and S&P 500 — fell over 3.75% each. The decline was a result of hawkish comments from the US Federal Reserve and potential cascading effects arising from the failure of the Silicon Valley Bank — the largest bank by deposits in Silicon Valley.

The S&P 500 was the biggest loser, going down by 4.55% — reaching its lowest point since early January. The Dow Jones lost 4.44%, while the Nasdaq declined 3.75% over the course of the week.

The US jobs report released on Friday, 10 March, helped alleviate concerns about significant rate increases. This came after Fed chair Jerome Powell cautioned that policymakers might raise rates beyond expectations if future data indicates high inflation, despite nearly a year of tightening measures.

Stocks this week will be tested by the result of the inflation report which is due on Tuesday, 14 March. A hotter-than-expected CPI report will raise fears of a big policy rate hike by the Fed. Furthermore, retail sales data — which measures the change in the sales volume at the retail level in the US — is due to be released a day later on Wednesday, 15 March.

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