The US dollar is fluctuating against major currencies at the start of trading. It is gaining against the EUR (+0.10%), CHF (+0.06%), and CAD (+0.06%). However, it is losing ground to the JPY (-0.63%), GBP (-0.20%), AUD (-0.30%), and NZD (-0.17%). The yen has gained strength after the Bank of Japan indicated a careful approach to balancing political risks and economic progress. Although rates stayed the same for September, there might be a rate hike by the end of the year if the price target is met. A decision on cutting purchases of super-long Japanese government bonds is expected by September 30, 2025.

US Market Movements

US yields are seeing slight increases today: the 2-year yield is at 3.523%, the 5-year at 3.593%, the 10-year at 4.072%, and the 30-year at 4.722%. Major US stock indices are rising in futures trading, with the Dow up 82 points, S&P up 13.10 points, and NASDAQ up 47.2 points. Apple’s shares are down 0.10% in premarket trading, despite a 16.5% rise since August. Nebius is soaring 54% thanks to a big deal with Microsoft. Oracle shares are up 1.38% in premarket ahead of expected Q1 earnings. Other market changes include crude oil rising to $62.84, gold increasing to $3,654.80, and Bitcoin trading at $112,719. The signal from the Bank of Japan about a possible year-end rate hike is crucial now. Traders are already adjusting by selling USDJPY, but the biggest moves may happen as we approach the fourth quarter. It could be wise to consider buying puts on USDJPY or setting up bearish option spreads to trade the likelihood of policy changes. This shift is backed by data from Japan’s Statistics Bureau, which shows core inflation steady at 2.9% for the third month, very close to the BOJ’s target. This marks a significant change from the negative interest rates we exited in 2024. We expect the implied volatility for the yen to rise before the late-year BOJ meetings, highlighting the importance of options.

Broader Economic Trends

The Nasdaq reaching new highs indicates a strong appetite for risk, especially in technology. Stocks like Nebius, which jumped 54% because of the Microsoft deal, demonstrate the potential in AI and infrastructure. Considering call options on the Nasdaq 100 index could harness this momentum, but we should be cautious since we are at all-time highs. The wider economy supports this trend; the latest report from the U.S. Bureau of Economic Analysis shows that business investment in intellectual property products increased by 8.5% last quarter. For standout stocks like Nebius, the high implied volatility makes selling premium through puts or calls a viable strategy for high-risk investors. Meanwhile, the upcoming Oracle earnings will test if the enterprise software market has more to give. The ongoing rise in gold to new highs, even alongside a stock rally, is noteworthy. It’s not merely fear-driven; strong institutional demand appears to be in play. Recent disclosures from August 2025 confirm central banks bought another net 75 metric tons, indicating sustained demand for gold. Given this ongoing buying and bullish trend, considering call spreads on gold futures could be a way to benefit from further increases. With prices above $3,650 and no technical resistance in sight, more trend-following traders might enter the market soon. The quiet economic calendar this week could allow these trends to persist uninterrupted. Create your live VT Markets account and start trading now.

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