The S&P Global Composite PMI for the United States was 55.1 in July, higher than the expected 54.6. This indicates strong economic growth for the month. The EUR/USD rose, trading close to 1.1600, as the US Dollar weakened. Meanwhile, GBP/USD hit daily highs above 1.3300, thanks to changes in market trends. Gold prices continued to rise, reaching around $3,380 per troy ounce. This was linked to fluctuations in the US Dollar and varying US Treasury yields. The DeFi market is gaining popularity again, fueled by an increase in Total Value Locked (TVL) and more users. Investors are moving money from Bitcoin to leading layer-1 cryptocurrencies like Ethereum and Solana. In the euro area, the economy showed unexpected strength due to an agreement between the EU and the US and Germany’s spending plans. However, if wage indicators continue to weaken, the European Central Bank (ECB) may decide to cut rates later this year or early next year. The US economy keeps performing well, with the July Composite PMI at a strong 55.1. This is backed by last Friday’s jobs report, which added 215,000 jobs and exceeded expectations, indicating ongoing economic strength. We think this makes a rate cut from the Federal Reserve unlikely in the near term, which traders should consider when making decisions about US index positions. Despite the strong data, the dollar is losing ground. The Euro is approaching the 1.1600 level, a peak not seen since late 2021. This suggests that traders are anticipating other factors, possibly looking forward to next week’s important inflation data. For now, strategies that bet on continued dollar weakness against the Euro and Pound, like long call spreads, could be appealing. Gold is gaining from this dollar weakness and uncertainty, now trading around $3,380 an ounce. This continues the rally that began in 2024, driven by ongoing inflation and geopolitical tensions. We think maintaining long positions or buying call options on gold miners is a smart move in this climate. In the digital assets space, there’s a clear shift towards risk-taking as money flows from Bitcoin into Ethereum and Solana. Total Value Locked in DeFi has surpassed $250 billion, showing renewed confidence that started growing late last year. This trend suggests that long positions on these top layer-1s might do better than Bitcoin in the coming weeks. Across the ocean, the Eurozone has shown surprising resilience, but signs of slowing are appearing. Wage growth reportedly decreased in the second quarter, strengthening the case for the ECB to cut rates later this year. We see this as an opportunity to create trades that could profit from a weaker Euro in the medium term, possibly using put options for late 2025.

here to set up a live account on VT Markets now