The Baker Hughes US Oil Rig Count is at 418, just below the expected 421. This difference could affect market activities and oil prices. Tensions over trade have risen with new tariffs on China set to begin on November 1. President Trump indicated he might pause negotiations with China because of ongoing trade issues.

Currency Market Reaction

The EUR/USD exchange rate rose to 1.1620 as trade tensions intensified. Likewise, GBP/USD reached new intraday highs due to a weakening US dollar against the British Pound. Gold is now priced around $4,020, reflecting a strong demand for this safe-haven asset amid US-China trade conflicts. In the cryptocurrency world, Bitcoin, Ethereum, and XRP are holding steady at key support levels, despite some risks of decline. US tariffs remain an important tool for foreign policy and public finances. Recently, the US has reiterated its strategy of using tariffs to shape international trade. Litecoin is performing well, trading at about $130 as retail interest grows. This is a positive sign amidst the overall volatility and bearish trends in the cryptocurrency market.

Market Trends and Opportunities

With the US oil rig count at 418, we see a decline from the 620 rigs we had in late 2023. However, fears of reduced demand from the renewed US-China trade war are overshadowing any tight supply, pushing WTI crude prices below $60. We suggest considering WTI put options to protect against a further drop toward $55 in the coming weeks. Gold breaking above $4,000 is a strong bullish indicator, driven by classic safe-haven demand. This situation resembles the rush to safety seen during the global uncertainties of 2020 and the inflation spike of 2022. We expect ongoing inflows, making long positions in gold futures or call options appealing as geopolitical risks stay high. The falling Dow Jones reflects a clear risk-off trend in equities, prompting us to adjust our strategies. We predict the CBOE Volatility Index (VIX) will rise, similar to increases during the 2019 trade disputes when it often exceeded 20 due to tariff news. Buying VIX call options or S&P 500 put options can be a straightforward way to profit from this growing uncertainty. Even with usual risk-off behavior, the US dollar is weakening as the market anticipates negative economic effects from the new tariffs. This has lifted the EUR/USD above 1.1600 and suggests a bearish outlook for the dollar index (DXY). We see this as a chance to short the dollar against a range of G10 currencies using futures or options. Create your live VT Markets account and start trading now.

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