This week, the focus among traders was about volatility. As you recall, a common theme among investors in the past year has been about the lack of volatility in the market. During the year, the CBOE VIX index, also known as the fear index, was on historic lows.

On Friday last week, all this changed when the jobs report came. Investors started getting worried about inflation, which pushed the VIX higher by more than 100%. Global stocks slumped while bond yields rose.

This week, the global market failed to find a support and yesterday, the S&P 500 officially entered the bear market. As such, these low prices could persist because historically, a bear market tends to stay for more than 72 days.

The chart below shows the weekly performance of the major global stocks.

This week, the Bank of England held its first meeting this year. This meeting ended with the committee leaving interest rates unchanged. However, investors watched the messaging from the committee which was more hawkish than expected. Shortly after the data came out, the pound rose to the highest level in five days. Later in the day, it started to go down. As of this writing, the pound is down 60 bps against the dollar.

This week, the dollar has been a winner, with the dollar index up by 2.04%. This index weighs the dollar against the major currencies like the pound, euro, and yen. The surge in the dollar is attributed to the perceived notion that inflation could peak up which will lead to higher interest rates.

The surge on the dollar has had a negative reaction to gold, which has shed more than 2.3% of its value. As I have written before, gold and the dollar have one of the best negative correlation in the financial market. In most cases, when the dollar rises, gold tends to fall as investors exit their gold positions. This is because many investors buy gold for its store of value and its use as a currency.