On the morning of August 11, 2025, European markets were mostly quiet. Investors were being cautious as they awaited the important US CPI report. Notable statistics included Italy’s final HICP for July at 1.7%, which stayed the same as the preliminary results, and SNB total sight deposits at CHF 465.9 billion. A Bank of America survey indicated that the biggest concern for investors was trade war risks at 29%, with inflation following closely at 27%. The dollar held steady, even though it was vulnerable after last week’s drops. Major currencies moved little; EUR/USD fell 0.1% to 1.1625 and GBP/USD declined 0.2% to 1.3425. Conversely, USD/JPY rose by 0.1% to 147.88, and USD/CAD increased by 0.2% to 1.3780. In the stock market, European indices and US futures remained mostly unchanged as everyone awaited the US inflation figures.

Cryptocurrencies And Commodities

Cryptocurrencies like Bitcoin and Ethereum started the day off strong, buoyed by weekend gains. Bitcoin climbed 0.9% to $120,382, and Ethereum hit $4,300, although these gains have since tapered. Gold dipped 1.3% to $3,352.64 as traders looked for updates on US tariffs. Meanwhile, WTI crude rose by 0.5% to $64.19. As we wait for the US inflation report tomorrow, the market is in a holding pattern. Last month’s Core CPI for July 2025 was stuck at 3.8%, and this upcoming report could influence market direction for the quarter ahead. Derivative traders should gear up for increased volatility after the announcement. There’s a noteworthy caution regarding potential declines in equities over the next three months. This suggests that purchasing protective puts on the S&P 500 could be a wise move to guard against a short-term drop. A similar situation occurred in spring 2024 when inflation worries caused a brief market dip, followed by a strong recovery. The volatility index, or VIX, is currently around 18, indicating that fear is not extreme at the moment. This means options aren’t overly expensive for those wanting to take a directional bet on the CPI data. A straddle—buying both a call and a put option—could help profit from a significant price change in either direction.

Gold and Currency Market

Gold is retreating from its highs while we wait for clarity about US tariffs and the dollar’s direction. This price stabilization is reminiscent of the late 2024 period before gold surged past $3,000. Traders might use options to navigate this range or set up for the next big move based on inflation data. In the currency market, the US dollar is at a crucial point after its fall last week. If tomorrow’s inflation numbers are lower than expected, the dollar may dip, benefiting pairs like EUR/USD. Using options on currency ETFs could be an easy way to position for this likely scenario. The summer of cryptocurrencies continues with Bitcoin trading above $120,000, showing strong momentum. Given the high volatility, using options to manage risk may be smarter than trading futures with high leverage. This way, traders can participate in potential gains while limiting losses if the market suddenly changes course. Create your live VT Markets account and start trading now.

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