Optimism Holds, But Volatility Stays Low

After the chaos of the previous week, Monday started off on a much calmer note. The calendar was empty, and the markets reflected that with muted movements and extremely low volatility. It seems traders are still digesting the impact of the recent trade war developments, and the market is taking a breather—for now.

Tuesday’s economic calendar is slightly more active. We already had UK claimant count change data, which came in below expectations at 18,000. The main highlight of the day, however, will be Canada’s inflation report. CPI is expected to drop from 1.1% to 0.7% on a monthly basis, and that could introduce some movement on CAD pairs later in the session.

In terms of market performance, European indices opened with a mild dose of optimism, while U.S. futures are slightly in the red ahead of Wall Street’s opening. Overall, indices are trying to hold on to last week’s impressive gains.

On the forex front, we’re seeing strength in antipodean currencies—both the Australian and New Zealand dollars are gaining ground. Meanwhile, safe haven currencies like the Swiss franc and Japanese yen are under pressure, which usually suggests a slightly improved risk appetite across the board.

Commodities are also showing strength, especially metals. Gold continues its remarkable 2025 rally—currently up 22% year to date—which underlines strong demand for the precious metal. Oil is attempting to hold on to its recent rebound and remains relatively stable for now.

In summary, markets remain cautiously optimistic as we await fresh data to set the tone for the rest of the week. Let’s see if today’s inflation figure from Canada will be a catalyst for renewed volatility.

Source: https://www.axiory.com/analytics/market-news/optimism-holds-but-volatility-stays-low