We are approaching the key day of the week, Friday, when US labor market data will be released, but even before that there is no shortage of emotions. Oil and the Turkish lira came to the fore in the middle of the week.
Crude oil prices seem to have continued their gains for the third session in a row, with a barrel of WTI trading near its highest level since October 2018, above $68. Optimism over strong fuel demand and OPEC+'s agreement to maintain its plan to gradually ease supply constraints through July seems to be the main factor helping oil.
The Saudi energy minister showed confidence that a solid recovery in demand in the U.S. and China, the world's two largest oil consumers, along with graft will further rebalance the global oil market. Two Western diplomats said it was unlikely that world powers and Iran would reach a final agreement in the current round of talks to revive the 2015 nuclear deal.
Turkish authorities are not helping their currency
The Turkish lira on Wednesday slid to another record low of 8.7775 against the US dollar. Just before that, President Recep Erdogan said that interest rates must be cut within the next two months, adding that he had discussed it with the new central bank governor.
Turkey's inflation data for May is due to be released on Thursday, with forecasts pointing to a further rise to 17.3 percent, the highest since May 2019. The lira was also not helped by the decision to remove deputy central bank governor Oguzhan Ozbas, two months after Erdogan fired bank governor Naci Agbal, which led to the strong weakening of the lira in March.
Cryptocurrencies ahead of another period of high volatility?
The cryptocurrency market seems to be witnessing the quiet before the storm. The daily volatility of bitcoin, as measured by the RSI (14) indicator, has fallen to levels last seen in March 2020. The RSI (14) indicator for weekly volatility, on the other hand, is at its lowest level since April 2020. This means that it has not been as quiet in the bitcoin market for over a year as it is now.
Volatility, however, is a sinusoidal measure. This means that periods of high volatility could be followed by periods of stagnation, followed by periods of high volatility again. Therefore, it is possible that the crypto market may be preparing for another period of major price changes.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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