In October, Mexico’s unemployment rate dropped to 2.6%, which is lower than the expected 2.8%. This shows that job availability is improving in the country. The unemployment rate is an important measure of the economy. A lower rate suggests more jobs are available and could indicate economic growth.

The Global Economic Overview

The AUD/USD exchange rate is steady, while Australian inflation remains stable and the US dollar is losing strength. Copper prices have risen above $11,000 per ton due to supply worries, according to Commerzbank. Platinum has climbed to its highest level in over a month, trading at $1,650, and silver has surged past $54, outperforming gold. Meanwhile, China’s gold imports have hit a seven-month low. India’s imports of Russian oil reached a five-month peak in November. The EUR/USD rate is below 1.1600 after German inflation data revealed an annual CPI inflation of 2.3%. GBP/USD is sliding toward 1.3200 in a cautious market. Gold is consolidating below $4,200 but has gained over 2.5% this week, bolstered by expectations of a rate cut from the Federal Reserve.

Expectations From The Federal Reserve

The next few weeks will focus on US economic data that could confirm the market’s hopes for a Federal Reserve rate cut. Currently, Fed funds futures indicate an over 85% chance of a 25-basis-point cut at the December meeting. This marks a big shift from the tightening period we saw earlier this year. Any surprises in the upcoming PCE inflation or jobs data could drastically change these odds and increase market volatility. This cautious outlook is keeping gold prices strong below $4,200 an ounce, making it one of the top performers this month. Considering call options on XAU/USD could be wise to take advantage of a potential rally if the data suggests a Fed rate cut. This could give us upside potential while maintaining some risk protection if the central bank’s stance changes. Industrial metals are performing strongly, with copper rising above $11,000 per ton due to ongoing supply issues and demand from the green energy sector. Silver, now over $54, benefits from its industrial applications and as a monetary hedge, making long positions in futures contracts potentially profitable. We’ve seen this trend before, such as in the recovery of 2020-2021, when industrial demand pushed prices up sharply. The weaker US dollar is supporting currencies like the Australian Dollar, but the AUD/USD’s momentum is limited by stubborn domestic inflation. As the EUR/USD and GBP/USD consolidate, it may be wise to use options to trade within ranges, like iron condors, until a clear trend appears after US data. Thin trading volumes during last week’s holiday may have exaggerated some movements, so caution is advised. Mexico’s economy is surprisingly strong, with the unemployment rate dropping to 2.6% in October, significantly better than forecasts. This follows reports showing Mexico’s Q3 GDP grew a solid 3.1% year-over-year, driven by nearshoring investments. Taking derivative positions that favor a stronger peso, like buying MXN calls against the dollar, seems justified based on this strong economic backdrop. In the cryptocurrency market, the mood is very bearish following the flash crash on October 10, which wiped out significant retail investor capital. Open interest in Bitcoin futures has fallen by nearly 30% since the crash, reflecting a lack of trader confidence. Buying put options on major cryptocurrencies or related stocks could act as insurance against further declines. Create your live VT Markets account and start trading now.

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