Should we be wary of low volatility?

Should we be wary of low volatility?

05.04.2021

Although both European and U.S. markets were closed last weekend for holidays, crude oil rose to $61.00, and gold recovered to $1,725. In addition, following the release of last weekend’s U.S. employment report, both long-term and short-term U.S. interest rates rose significantly. Furthermore, Bitcoin, which had temporarily fallen to the 5.5 million yen range, has recovered to the 6.3 million yen range.

The foreign exchange market opened at the start of the week without a significant gap. While cross-yen pairs are showing a slight downward trend, overall volatility remains low, giving the impression of a modest decline rather than a sharp drop. During today’s Asian trading session, the Australian dollar—an Oceania currency—has emerged as the strongest currency, with the AUD/USD pair pushing higher around the 0.762 level.

Markets in Oceania, Europe, and China are closed today for public holidays, while U.S. markets are operating as usual.First, at 4:00 PM European time, Turkey’s Consumer Price Index and Producer Price Index will be released. In U.S. time, the U.S. Services PMI (final reading) is scheduled for 10:45 PM, followed by the U.S. ISM Non-Manufacturing Index and the U.S. Manufacturing Orders Index at 11:00 PM. We will carefully monitor how the recent trends of rising stock prices, higher interest rates, and a weaker yen evolve this week.