A U.S. court ruled that Google must share certain search data with its competitors but does not have to sell its Chrome browser. This decision was good for Alphabet, leading to a rise in its stock and positively impacting other tech stocks and U.S. equity futures. In financial news, Japanese government bond yields went up, putting pressure on the yen. The USD/JPY reached highs of around 148.95 during the U.S. session, while USD/CHF was also near Tuesday’s peak. The dollar remained steady against most other major currencies.

Strong PMI Data From Asia

Reports from Australia, Japan, and China showed strong growth in PMIs. Australia’s Q2 GDP exceeded expectations thanks to increased spending and lower household savings, which affected predictions for interest rate cuts by the Reserve Bank of Australia. RBA Governor Bullock will speak at 0600 GMT. In Beijing, President Xi held a military parade with North Korea’s Kim Jong Un and Russia’s Vladimir Putin present. President Trump claimed the three nations are working together against the USA. The London Metal Exchange delayed the start of Asian trading by 90 minutes, opening at 9:30 a.m. Beijing time. No reason was given for the delay, leading to speculation about potential issues involving a major participant.

Court Ruling On Alphabet Impact

The court ruling on Alphabet is a big win for tech companies, suggesting that regulatory worries may have been exaggerated. We think this is a good reason to invest in the Nasdaq 100. Implied volatility, which was over 20% last week, is likely to decrease, making near-term call spreads on the QQQ exchange-traded fund a smart way to capture further gains. The ongoing weakness in the Japanese yen, driven by rising local bond yields, indicates a strong trend. With the U.S. 10-year Treasury yield holding over 350 basis points above its Japanese counterpart, carry trades remain very profitable for institutions. It may be wise to buy USD/JPY call options targeting the 150 level, which is a critical psychological barrier last seen in late 2022. Stronger-than-expected Australian economic data is a major shift for their central bank. The household savings rate has dropped to a low of 3.2%, showing that consumers are still spending and driving inflation. Consequently, the market’s expectation for a Reserve Bank of Australia rate cut by year-end has fallen from over 50% to just 10%, which should continue to support the Australian dollar. The geopolitical tension in Beijing involving China, Russia, and North Korea is creating noise that markets are largely ignoring for now. The CBOE Volatility Index (VIX) is currently below 17, a level that feels overly relaxed given the clear formation of an anti-U.S. alliance. We see this as a chance to buy inexpensive protection through out-of-the-money put options on the S&P 500. The sudden pause in trading on the London Metal Exchange raises concerns about liquidity and counterparty risk in the industrial metals market. The nickel market crisis a few years ago showed how quickly situations can escalate. Until clarity is achieved, it may be best to avoid new directional bets and consider options strategies that could benefit from a potential rise in volatility, like a long straddle on copper. Create your live VT Markets account and start trading now.

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