China’s industrial production rose by 4.8% in November compared to last year, which is below the expected 5% growth. This suggests that industrial growth is slowing more than anticipated. In other news, the market saw a mix of trends. The GBP/USD pair stayed stable in the mid-1.3300s, while gold prices climbed to $4,330 as investors anticipated important US economic data.

Cryptocurrency Market Developments

In the cryptocurrency world, Solana’s price is nearing a potential breakout, thanks to nearly $1 billion in spot ETF inflows from institutional investors. Aave (AAVE) also looks like it might break out, trading above $204. The S&P 500 rose following a US Federal Reserve rate cut earlier in the week, which many viewed as cautious. This helped boost non-tech sectors of the market. Investors should thoroughly research before making decisions, as there are risks and emotional stress involved. FXStreet and its authors do not offer personalized investment advice; all information should be reviewed carefully. China’s industrial production growth for November was at 4.8%, lower than the 5% expected, indicating ongoing economic slowdowns. This marks the third month of slowing growth, which could negatively impact industrial commodities. It’s a good time to consider buying put options on commodity-linked assets, like Australian dollar futures or major mining stocks, to hedge against further declines.

Federal Reserve Rate Cut and Market Impact

The recent Federal Reserve rate cut has pushed the S&P 500 up, but this increase could be fragile amid signs of a global slowdown. The US 2-year yield is around 3.50%, and derivatives markets suggest a 65% probability of another rate cut by March 2026, signaling the Fed’s concerns about growth. Traders should prepare for higher volatility by buying VIX call options or using index option straddles for potential sharp moves in either direction. There’s a significant split in the commodities market that traders can take advantage of. WTI crude oil is struggling to stay above $57 a barrel, reflecting weak manufacturing data from China, while gold has surged past $4,300 an ounce. This difference suggests a stagflationary environment, and a pair trade of long gold futures against short crude oil futures might be a smart strategy in the coming weeks. In currency markets, the weakness of the Japanese Yen is a major factor, supporting pairs like AUD/JPY even as Australia faces challenges from China. The Bank of Japan’s commitment to its loose monetary policy, confirmed in November 2025, continues to burden the Yen. Therefore, using options to establish a bearish position on the Yen against a basket of currencies could provide opportunities, despite slowdowns in other markets. Create your live VT Markets account and start trading now.

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