China’s industrial production rose by 6.5% in September compared to last year, beating the expected 5%. This indicates strong growth in the country’s industrial sector. In other financial news, the AUD/JPY climbed above 98.00 as Japan’s political situation suggested the potential for a female prime minister. Meanwhile, worries about an oversupply from OPEC+ kept WTI crude oil prices around $57.00.

Cryptocurrency Weekend Rebound

Over the weekend, cryptocurrencies like Mantle, Zcash, and Bittensor bounced back nearly recovering from Friday’s declines. However, BNB, Solana, and Cardano faced significant drops during the same period, with total market losses exceeding $1 billion. In the forex market, GBP/USD stayed strong above 1.3400 thanks to a weaker USD, despite the Bank of England’s cautious outlook. At the same time, EUR/USD saw limited movement after S&P Global Ratings downgraded France’s credit rating. Gold prices dipped to roughly $4,245 as demand waned post-festive season. Looking ahead, the finance world is watching the Trump-Xi meeting at the APEC summit, where ongoing tensions are likely to be discussed without immediate resolutions. With China’s industrial production unexpectedly rising to 6.5% last month, we can expect continued strength in the Australian dollar. Strong demand for raw materials is a positive sign for Australian exports. September iron ore shipments to China increased by 8% from the previous month, suggesting that investing in AUD call options or futures could be a smart move.

Shorting Opportunities in Japan

In Japan, current conditions offer a chance to short the yen. The Bank of Japan is hinting at stepping away from its loose monetary policy just as a new government coalition raises concerns about budget discipline. This situation is likely to put pressure on the yen, a trend not seen since before the country’s long struggle with deflation. France’s credit rating downgrade by S&P poses a significant challenge for the Euro. The gap between French and German 10-year bond yields has widened to 75 basis points, marking its highest level since the 2022 energy crisis. We should consider buying puts on the EUR/USD, as this points to deeper problems in the Eurozone. Crude oil’s weakness, with WTI staying around $57, sends a bearish signal despite strong manufacturing data from China. The market is largely focused on OPEC+ oversupply, with recent reports indicating that compliance with production cuts has hit its lowest level this year. This situation creates opportunities to profit from falling prices or increased volatility in energy markets. As the upcoming Trump-Xi meeting at APEC is set to be a tense negotiation, investing in volatility seems wise. The CBOE Volatility Index (VIX) is currently at a yearly low of 14, making call options an affordable way to hedge against negative outcomes. We recall how the 2018-2019 trade war led to sharp market fluctuations, and this summit presents similar risks. Create your live VT Markets account and start trading now.

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