Germany’s import price index rose by 0.5% in November, exceeding the expected growth of 0.1%. This increase indicates that the cost of imported goods is impacting the economy. The United States Bureau of Economic Analysis will release the preliminary estimate for the third-quarter GDP on Tuesday at 13:30 GMT. Analysts expect an annual growth rate of 3.2%, slightly lower than the previous quarter’s 3.8%.

Market Predictions

The article also looks at the EUR/USD, GBP/USD, and gold markets, highlighting possible future changes. These predictions take into account how upcoming economic data might influence market movements. Germany’s rising import prices suggest ongoing inflation in the Eurozone’s largest economy. This persistent inflation is reminiscent of the post-pandemic increase seen in 2022-2023, implying that the European Central Bank may postpone planned interest rate cuts. This unexpected strength could stabilize the Euro in the short term. In the U.S., the economy is experiencing solid growth in the third quarter, but we need to look at more recent data for a clearer view. The latest forecast from the Atlanta Fed for the fourth quarter of 2025 has been revised down to 1.9%, indicating a potential slowdown as we move into 2026. This difference between strong past performance and a weaker future creates uncertainty for the U.S. Dollar.

Future Economic Outlook

With these mixed signals, we expect increased volatility in the EUR/USD pair. Consider strategies like long straddles, which could benefit from significant price movements in either direction as the market decides which narrative to follow. A recent Reuters poll indicates that derivative markets anticipate a 25% greater chance of a 100-pip move in EUR/USD in January 2026 compared to this month. Higher inflation data from Germany also makes options on German Bund futures more appealing. If inflation compels the ECB to stay hawkish, bond yields are likely to rise, leading to a drop in futures prices. We could explore buying put options on Bund futures to take advantage of this potential policy change from Frankfurt early next year. In U.S. markets, the anticipated slowdown in growth poses risks for equities, particularly after the strong performance of the S&P 500 in autumn 2025. Current implied volatility on S&P 500 options, as indicated by the VIX, is near a low of 13.5, seen as historically cheap. Purchasing VIX call options or puts on major indices could provide a cost-effective hedge against a potential market downturn in the first quarter of 2026. Create your live VT Markets account and start trading now.

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