Cryptocurrency and Commodities Overview

Gold prices dropped to a low of $3,634 but have since recovered by 0.2% to $3,666. WTI crude oil also increased by 0.4%, reaching $64.31. In the cryptocurrency world, Bitcoin rose by 1.3%, now trading at $117,178. The market is eagerly awaiting U.S. data, especially weekly initial jobless claims, which could either support or challenge the Federal Reserve’s current outlook. Equities are responding positively, with expectations that the Fed may be close to its peak. Traders are considering bull call spreads on the S&P 500 to take advantage of potential gains. The VIX is hovering around 17, indicating some ongoing uncertainty. These defined-risk strategies are useful for protecting against a downturn if upcoming U.S. data comes in unexpectedly strong. The drop in 10-year yields to 4.06% indicates that the market is questioning the Fed’s cautious stance, similar to trends seen in late 2023. We believe buying call options on 10-year Treasury futures (ZN) could be a good bet on this trend continuing. This strategy will work if jobless claims or inflation data show the economy cooling more quickly than expected.

Bank of England Policy Outlook

The Bank of England’s choice to maintain its rate at 4.00% creates a clear contrast with the Federal Reserve. This difference is putting pressure on the pound as capital moves toward currencies that offer higher returns. Buying puts on GBP/USD seems like a straightforward way to trade this trend over the coming weeks. New Zealand’s economy is showing signs of weakness, with a recent GDP report revealing a 0.2% contraction for the second quarter. This makes the NZD vulnerable, especially since other central banks are either maintaining their rates or adopting a hawkish stance. The 1.0% drop in NZD/USD appears to signal a new downward trend, making put options on the pair an appealing choice. Gold remains strong above $3,600, indicating that traders are still searching for protection despite the stock market rally. Given the high price, using call spreads is a cost-effective way to speculate on a continued rise toward the $3,700 level. This strategy also serves as a hedge in case simmering geopolitical tensions resurface. Create your live VT Markets account and start trading now.

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