Spain’s Harmonised Index of Consumer Prices (HICP) showed a year-on-year growth of 3.2% in October, which matches predictions. This number highlights the current consumer price trends in the country. In other market updates, the USD/INR has dipped slightly, following a 1.21% drop in India’s Wholesale Price Inflation. Meanwhile, the EUR/USD has also decreased from its recent highs, although strong data from the Eurozone is still supportive.

Pound Sterling Recovery

The pound sterling has seen a small recovery after the UK’s fiscal deficit was reduced to £20 billion. In currency trading, the USD/CHF has hit new four-week lows, currently at 0.7900, as investors are being cautious. The Eurozone’s GDP for the third quarter confirmed a 0.2% quarter-on-quarter growth, which strengthens the Euro’s standing. However, GBP/USD is under pressure due to concerns about the UK’s financial situation, while gold prices remain below $4,200 in a hesitant trading environment. In the cryptocurrency sector, Bitcoin, Ethereum, and Ripple are facing possible downsides due to a market selloff. Additionally, Solana has dropped to a five-month low as fund inflows and investor confidence wane. With Spain’s inflation at exactly 3.2%, the likelihood of a hawkish move by the European Central Bank (ECB) in December has decreased. This predictability lowers market volatility, suggesting that short-term options selling on European indices could be a good strategy. However, it is clear that inflation is still above the ECB’s target of 2%.

Eurozone’s Economic Outlook

The ECB is in a tough position, as Eurozone GDP growth for Q3 is only 0.2%. This situation of slow growth combined with lasting inflation limits the ECB’s ability to take strong actions. We expect a stable market for EUR-based assets, making strategies like iron condors on pairs like EUR/USD appealing in the upcoming weeks. When we compare to the high inflation period of 2022-2023, the current rates seem manageable but still hinder the ECB’s rate cut considerations. Meanwhile, recent US data from October 2025 shows a rise in core inflation to 3.8%, indicating that the Federal Reserve will likely keep its stricter policies for a longer time. This difference in policy could cap the EUR/USD exchange rate around the 1.1650 mark. The steady inflation outlook has brought the VSTOXX volatility index down to 17.5, its lowest level in two months. While this suggests a calm market, it might be a good time to think about purchasing long-term protection against unexpected shocks. We’ve seen how quickly market sentiment can change, like during the energy supply scares in the winter of 2024, so the current low volatility makes protective put options relatively affordable. Create your live VT Markets account and start trading now.

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