The US and Canada are celebrating Labour Day, leading to a long weekend with closed markets, including Wall Street and the Treasuries market. This leaves European traders in charge, while US futures remain open with an uncertain outlook. The dollar is slightly weaker, and gold is on the rise, aiming for the $3,500 target. Market players are also grappling with the effects of Trump’s tariffs, which continue to influence market conditions.

Economic Data Releases

Later, several economic reports will come out in Europe. These include the final manufacturing PMI for August, UK credit data, and the Eurozone unemployment rate. These releases are not likely to significantly sway the markets today. With US markets closed for Labour Day, we should be cautious of major movements in Europe. Low trading volume can lead to misleading price changes that might reverse once Wall Street reopens. Today is best spent observing the market rather than jumping into new positions. The ongoing uncertainty about tariffs is the key issue, leading to increased market volatility. The VIX, which measures market fear, has recently risen above 22, showing this anxiety. This suggests that buying options, like puts on broad market indices such as the S&P 500, could be a smart way to protect against potential downturns in the weeks ahead.

Market Strategies Amid Uncertainty

We remember how specific sectors reacted during the trade disputes of the late 2010s. The new tariffs could produce clear winners and losers. Traders might consider put options on European car manufacturers and call options on their US counterparts. This strategy helps isolate the impact of the new trade policies. The dollar’s weakness and geopolitical tensions are supporting gold prices. With ongoing inflation concerns—like the July 2025 US CPI reading of 4.1%—the demand for gold as a hedge is increasing. Using call options on gold futures or gold-backed ETFs can directly capitalize on a move above the $3,500 mark. Even though upcoming European data like manufacturing PMIs are typically not major events, a nervous market can overreact to any news. Exploring option spreads such as bull call spreads or bear put spreads may be a wise strategy. This approach allows for directional bets while managing risk and reducing upfront costs in today’s volatile environment. Create your live VT Markets account and start trading now.

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