The claimant count change in the UK for December was 17.9K, just below the expected 18.8K.

Market Observations

Recent market updates show that EUR/USD has bounced back due to trade tensions between the EU and the US. Gold remains in high demand as concerns over trade wars lead people to seek safe investments. AUD/JPY hit around 106.80, influenced by fiscal issues affecting the JPY. Meanwhile, geopolitical tensions have driven the prices of gold and silver to new highs. EUR/CAD rose close to 1.6200, despite a generally cautious market. Political happenings in Japan are creating market instability, affecting Japanese Government Bonds (JGB) yields. The UK claimant count for December 2025 was slightly better than expected, indicating some strength in the job market. UK inflation has been stubbornly high, staying above the Bank of England’s target for most of 2025. Any signs of economic strength may prevent interest rate cuts for now. This mixed data suggests that using options strategies, like straddles on GBP, might be a smart way to capitalize on potential market shifts around upcoming inflation reports.

Geopolitical and Economic Tensions

The markets are feeling a strong risk-off mood due to geopolitical pressures and rising trade war concerns. This has propelled gold to a new record high of over $4,700 as investors seek safety. The VIX (Volatility Index) has averaged more than 20 this past month, a stark increase from the calm of 2024. This trend makes buying call options on precious metals or volatility indices a wise choice. The Japanese Yen is weakening considerably due to political issues at home and rising government bond yields. This is clear as AUD/JPY has reached its highest level since mid-2024. Japan’s debt-to-GDP ratio exceeded 260% in 2025, presenting a significant challenge that makes bearish positions on the JPY through futures or options attractive. There is also noticeable weakness in the US Dollar, pressured by renewed trade tensions with the European Union. This has helped EUR/USD rise above 1.1650, showing that the Euro is becoming more appealing. Recently imposed tariffs on about $150 billion in transatlantic trade each year are the main driver here, supporting strategies that favor the Euro over the Dollar. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now