Japan’s national Consumer Price Index, which excludes fresh food, increased by 2.9% compared to last year in September. This rise matches what the market expected. In currency markets, the Australian dollar fell as the US dollar gained strength ahead of the upcoming US CPI data. The USD/CAD pair went up past 1.4000 due to more risk aversion and lower oil prices. In the metals market, gold prices lingered around $4,100 as the stronger US dollar and higher Treasury yields affected the market. Traders are waiting for US-China trade talks and US CPI results.

Cryptocurrency Trends

In the world of cryptocurrency, Ethereum whales—those holding between 10,000 and 100,000 ETH—continued to buy more, despite weak metrics. Over the weekend, they acquired more than 200,000 ETH. Meanwhile, Aster’s price rose slightly above $1.00, showing positive sentiment in the broader crypto market. In global economic news, the Japanese yen stabilized after Sanae Takaichi became Japan’s new Prime Minister. This change has led the market to think about how Japan’s fiscal policy and monetary approach might shift. Additionally, China’s state planner announced plans for major investment projects. Japan’s inflation rate of 2.9% in September shows that high prices are becoming the norm, a trend we have observed since sustained inflation throughout 2024. Although this figure met expectations and didn’t surprise the market, it puts significant pressure on the Bank of Japan to respond. With steady inflation and a new Prime Minister, a major policy change seems inevitable. With Takaichi’s government in place, we should consider the end of yield curve control before the year ends. Discussions of fiscal expansion alongside the Bank of Japan’s need for monetary adjustments create strong possibilities for a stronger yen. This makes buying put options on the USD/JPY a smart move, as a quick and sharp currency shift could occur.

Global Market Focus

Worldwide, the market is keenly focused on the upcoming US CPI data, expected to be around 3.1%. Over the last 18 months, any positive surprise in US inflation quickly boosts the US dollar, putting pressure on risk assets. Trading volatility through straddles on major indices or currency pairs like the EUR/USD before the announcement could be profitable. We also see a clear difference in commodities: gold remains strong above $4,100, while WTI crude oil struggles around $61 a barrel. This pattern, noticeable since early 2025, indicates a preference for safety and doubt about global economic growth. Buying call options on gold futures or related ETFs offers a good way to benefit from ongoing market anxiety. The trend towards safety is further confirmed as USD/CAD rises above 1.4000, reflecting risk aversion and falling oil prices affecting the Canadian dollar. This behavior is reminiscent of market unease experienced in mid-2024, often seen before larger market drops. Hedging portfolios with put options on major equity indices should be a key strategy in the coming weeks. Create your live VT Markets account and start trading now.

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