Volatility jumps as markets prepare for action-packed period – Volatility Watch
- Euro/dollar volatility climbs to a new monthly high
- Volatility remains very elevated in both gold and silver
- Stock indices continue to experience average volatility
Euro/dollar volatility continues to increase, achieving a new 30-day high, as the markets are preparing for Friday’s jobs report, and next week’s US presidential election and the Fed meeting. This increased volatility is observed across the FX space, including the yen pairs. The yen remains under pressure as Sunday’s general election in Japan did not produce a majority government, making this week’s BoJ gathering a non-event.
Volatility in both gold and silver reached new monthly highs, despite these precious metals' mixed performance. However, with the US election remaining in the spotlight, demand for both assets will most likely remain potent. In the meantime, volatility in oil has eased further. Israel’s choice to carefully avoid hitting Iran’s oil installations, and thus avoid causing a strong oil rally ahead of the US election, has pushed oil prices aggressively lower.
With stock indices recording mixed weekly price movements, volatility across the board remains at average levels. Apart from the big events ahead, market participants are also digesting the third quarter earnings reports, with some heavy weights on schedule this week.
Finally, bitcoin’s rally above the $70k has resulted in a sizeable increase in volatility. The king of cryptos seems to be benefiting from the pre-election rhetoric and expectations for a strong rally if former President Trump wins a second term.
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