Italy’s Consumer Price Index (CPI) for December matched expectations, showing a small monthly increase of 0.2%. This steady CPI indicates how Italy’s economy performed at the end of 2025. The ADP Research Institute is set to publish its December Employment Change Report. It’s expected to show that the U.S. economy added 45,000 jobs, rebounding after a loss of 32,000 in November. This important data will help us understand the future of the country’s labor market.

Financial Markets Overview

In the financial markets, Aave is priced at approximately $172. If it breaks through its current technical pattern, it might increase further. Meanwhile, gold is facing some pressure, trading below $4,500 after earlier highs. Investors are focused on upcoming U.S. employment and PMI data. The market is anxious, especially for the EUR/USD and GBP/USD currency pairs, as critical U.S. economic data is on the horizon. These figures could shape Federal Reserve policy and influence global market trends. Overall, sentiment is uncertain, with upcoming economic reports likely to affect both local and international markets. Participants should remain cautious as these indicators may increase volatility in currencies and commodities. After last year’s anticipation, the U.S. labor data for December did show a recovery. The ADP report, released on January 2nd, revealed a stronger-than-expected addition of 60,000 jobs. This was backed by the official Non-Farm Payrolls report, which showed an increase of 85,000 jobs. This confirmed that the employment decline noted in November 2025 was only temporary.

Impact on Federal Reserve Policy

This economic improvement has changed our outlook on Federal Reserve policy for the upcoming weeks. The chances of an interest rate cut in the first quarter have dropped significantly, with futures markets now indicating less than a 20% probability of such a move before April. Traders may want to adjust their positions in interest rate futures to align with a more patient Federal Reserve. The stronger U.S. Dollar has shifted key currency pairs below last month’s levels. The EUR/USD has fallen below 1.0500, while the GBP/USD is testing support around 1.2200. Options traders should be alert for potential volatility as we approach the next inflation report, which will be crucial for the dollar’s movements. Gold has reacted predictably to the stronger dollar and firm interest rate outlook, losing its early 2026 gains. It is currently trading near $4,420, significantly lower than the $4,500 level it struggled to maintain a week ago. Traders with long positions might consider buying puts to guard against a drop toward the $4,400 support level. The political situation in Venezuela continues to impact the energy sector following Nicolás Maduro’s removal last month. While our forecasts remain unchanged, this event briefly drove WTI crude oil prices above $95 per barrel, though they have since stabilized around $92. Oil derivative traders should stay hedged against sudden supply announcements from the new government. In the crypto market, Aave (AAVE) has successfully broken out of the falling channel pattern we identified in late December. The price has risen from $172 to over $195, confirming a bullish trend. Traders who purchased call options during the breakout have enjoyed significant profits, and now the focus is on maintaining this momentum. Create your live VT Markets account and start trading now.

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