The Asian trading session was quiet as confusion continued over last week’s private oil inventory survey. Initially, the API report suggested a 19 million barrel increase, which was later corrected to an 839K rise. Official data will come out Wednesday morning U.S. time, with crude oil prices staying in a narrow range. Tariffs on pharmaceuticals and semiconductors will begin around August 1. Trump announced a trade deal with Vietnam and is working on five to six agreements, aiming to finish two to three by August 1. Other tariffs will impact smaller countries with duties over 10%. Trump also criticized Fed Chair Powell’s management as potentially questionable.

Fed’s Wait And See Stance

Dallas Fed President Lorie Logan confirmed the Fed’s “wait and see” approach on interest rates. While rates are steady, she noted that cuts may happen if inflation decreases or if the labor market weakens. Businesses are careful about passing on tariff costs, and the Fed will keep an eye on data this autumn. Major FX pairs had limited movement, and U.S. Treasury yields stayed high. ETH/USD reached a five-month high before Trump secured votes for the GENIUS Act, boosting optimism and demand in the Ethereum ecosystem. From recent news, the upcoming August 1 tariff deadline is a clear sign that we should expect increased market volatility. Historically, during the 2018-2019 trade disputes, the VIX—an indicator of stock market fear—increased by over 40% after similar tariff announcements. We believe buying options that benefit from larger price swings in major indices is a smart strategy for the following weeks.

Market Opportunities And Strategies

Logan’s comments suggest that the central bank will stay put, presenting an opportunity in interest rate derivatives. The CME FedWatch Tool shows a 35% chance of a rate cut by November, making options on Treasury futures that expire in late autumn appealing. This positions us for a potential policy shift once the Fed has clearer data on inflation and the labor market. The former president’s focus on specific trade deals offers targeted opportunities. With Vietnam’s exports to the U.S. up 14% year-over-year, options on currency ETFs that respond to Asian trade flows may be attractive. Additionally, since the U.S. imported over $60 billion in semiconductors last year, we are considering puts and calls on semiconductor ETFs to manage the expected volatility from new tariffs. In the energy market, confusion about oil inventories presents a short-term trading opportunity. The official government report on Wednesday could clarify the conflicting private survey data and lead to a significant price movement. We see this as a great chance for a straddle option strategy on crude, which profits from substantial moves in either direction. The positive legislative developments for digital assets provide strong support for the Ethereum ecosystem. With ETH/USD reaching a new high, we plan to use call options to take advantage of further upside potential driven by regulatory clarity. This trend is similar to the Bitcoin rally following the approval of spot ETFs, where prices skyrocketed over 60% in the ensuing months. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now