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  • Euro/dollar volatility drops as market prepares for an action-packed week

  • Volatility in commodities crashes to new lows apart from oil

  • Stock indices and bitcoin experience much lower volatility

Volatility in the main FX pairs, including euro/dollar, has eased in the past few days as the market is preparing for this week’s US labour market data releases that could play a key role in determining the size of the imminent rate cut by the Fed. Similarly, yen pairs are experiencing lower volatility as the yen remains on the back foot following the significant July outperformance.

In the meantime, volatility in both gold and silver has crashed to the lowest level of the past 30 days, as fears of a US recession have eased considerably, and despite both the Ukraine-Russia and Israel-Hamas conflicts generating headlines. On the contrary, volatility of oil prices has jumped aggressively higher. Oil remains under bearish pressure as the market is concerned about a larger-than-expected increase in production quotas in October.

The main US stock indices have been trading sideways lately, pushing volatility to the lowest level of the past month as equity investors feel more confident about the short-term outlook. However, this week’s US data could change the current market lull.

On the flip side, the German DAX index is experiencing strong volatility following last weekend’s dreadful regional election results for the coalition and rumours that German car manufacturers are preparing to announce factory closures.

Finally, with Bitcoin trading mostly sideways, volatility remains very low.