• Euro/dollar volatility has eased aggressively
• Volatility has dropped to monthly low in both gold and silver
• Stock indices experience a significant decline in volatility

Euro/dollar volatility has eased significantly, as market participants have reacted favourably to both the outcome of the US presidential election and the absence of the post-election shenanigans seen in 2020. The dollar has strengthened over the past week with the euro suffering the most. This reduced volatility is being observed across the FX space, including in yen pairs. The formation of a minority government in Japan has contributed to this lower volatility environment, but the outlook looks clouded.

Volatility in commodities has dropped to a new monthly low, despite both gold and silver weakening sizeably following the US election. Similarly, despite the two active conflicts in Ukraine and the Middle East, oil prices dived as the new US administration is expected to support US oil production, and China’s economic problems are not expected to be resolved anytime soon.

Stocks were the main beneficiaries of the US election outcome, with most stock indices recording strong weekly price gains. This post-election euphoria has pushed volatility to the lowest level of the past 30 days, across the board. Similarly, the cryptocurrency market is on fire with bitcoin rallying towards the $90k level and volatility jumping to the highest level of the past month.