• Euro/dollar volatility jumps aggressively higher
• Volatility remains very low in commodities, apart from gold
• Stock indices experience below average volatility.

Euro/dollar volatility has increased significantly over the past week, as the dollar continues to benefit from Trump’s win and the Fed’s mixed messages regarding the December 18 meeting. Euro crosses are experiencing elevated volatility, partly due to the weak euro area data keeping the door open to a sizeable ECB rate cut in December. However, the same situation is not observed in yen pairs. Recent verbal interventions by Japanese officials have kept volatility under wraps, despite the yen’s weak performance.

Volatility in both oil and silver remains relatively low, despite their mixed weekly price performance. Silver is down 2.8% on a weekly basis, but oil has gained more than 3% on the back of the escalation seen in the Ukraine-Russia conflict. Geopolitics have also perked up gold a bit, with its volatility edging higher and surpassing the one-month average level.

Stock indices did not get spooked by last week’s Nvidia results, and hence continued their gentle journey higher, with volatility remaining well below its recent average. Interestingly, the cryptocurrency market remains in the spotlight, with bitcoin diving towards the $93k level after failing to trade above $100k. Consequently, volatility remains extremely high, close to its monthly high.