• Euro/dollar volatility surges as dollar remains on the back foot
• Volatility in commodities reaches new monthly high, led by oil
• Stock indices experience strong volatility amidst a tentative rally

Euro/dollar volatility has jumped over the past week, as the FX market is whipsawed by the possibility of another strong Fed rate cut. Similarly, volatility of most yen crosses has risen aggressively, with the yen surrendering part of its recent sizeable gains on the back of weaker data and a general election called for late October.

Volatility in the commodities space remains elevated despite both gold and silver recording weekly price gains on the back of the dollar’s recent weakness and the start of Israel’s ground operation in Lebanon. In the meantime, WTI oil volatility jumped to the highest level of the past 30 days. It recorded another negative weekly move, despite the announcement of another array of support measures aiming to restart the Chinese economy.

While most stock indices recorded weekly gains on the back of further signs that the US economy is growing at a respectable pace, volatility across the board surged. Market participants are potentially preparing for a key week that could determine the size of the November rate cut.

Finally, bitcoin continues to experience very high volatility, close to the highest level of the past month, as it has failed to benefit from the muted risk-on momentum.