European stocks are hardly moving at the start of the trading day. The Eurostoxx remains flat. Germany’s DAX is up by 0.1%, France’s CAC 40 is down by 0.1%, the UK’s FTSE is up by 0.1%, Spain’s IBEX is steady, and Italy’s FTSE MIB has gained 0.2%. The market is cautious as everyone watches the upcoming Jackson Hole Symposium this week. Wall Street faced losses yesterday, mainly driven by tech stocks reacting to the Fed’s minutes. U.S. futures are showing little change today, with S&P 500 futures unchanged, Dow futures down by 0.1%, and Nasdaq futures up by 0.1%.

PMI and Market Reactions

We are expecting PMI data from France and Germany soon, but it is unlikely to change the ECB’s views significantly. With a quiet and mixed opening, the market appears to be holding back ahead of the Jackson Hole Symposium. This absence of clear direction opens a space for potential opportunities, as market volatility may be underestimated. The calm environment suggests that traders using derivatives should consider strategies that could benefit from a future increase in volatility instead of taking strong directional risks. Recent declines in Wall Street, especially in tech stocks, following the Federal Reserve’s minutes show a strong sensitivity to monetary policy. The latest U.S. CPI data for July indicates that inflation remains high at 3.1%, and unemployment is low at 3.7%. This leaves the Fed with little reason to hint at a softening approach. Thus, we should prepare for possible disappointment; markets that expect signals of rate cuts might be surprised by the Fed Chair’s hawkish comments. In Europe, the picture is different, with July’s Eurozone inflation lower at 2.8% and signs of economic stagnation. While the upcoming PMI data likely won’t cause major shifts, any noticeable weakness could strengthen the belief that the ECB will diverge from the Fed later this year. Monitoring the potential differences in policies between the U.S. and Europe will be crucial.

Volatility and Hedging Strategies

The CBOE Volatility Index (VIX) is currently low at 14, which means options premiums are cheap. This is an ideal time to buy protection or speculate on a sharp market move because of the speeches at Jackson Hole. We are considering strategies like buying straddles or strangles on the SPX and Nasdaq 100 indices, which would profit from significant price swings in either direction. For hedging, the tech sector’s vulnerability makes purchasing put options on the Nasdaq 100 a wise choice. This serves as protection against comments that reinforce the idea of “higher for longer” interest rates. Conversely, the mixed signals in Europe make it less clear whether to take broad directional positions on indices like the DAX or Eurostoxx 50 until we have more guidance from the ECB. We’ve seen this pattern happen several times in 2022 and 2023. Markets often drift quietly into major central bank events, only to experience sharp, decisive movements afterward. This has taught us that central bank commentary on inflation and future policy is the most important driver in this environment. The current market calm feels reminiscent of the quiet before those past turbulence periods. In the coming days, the focus should not be on predicting the market’s direction but on positioning for its inevitable movement. The flat futures we see today should be seen as an opportunity to build positions that could perform well once the symposium provides clear direction. It’s about preparing for a potential breakout from this indecision, which could occur suddenly. Create your live VT Markets account and start trading now.

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Walmart’s earnings are getting a lot of attention, especially due to the tariffs introduced by Trump. Back in May, Walmart warned that these tariffs could drive up prices since around one-third of its products come from abroad. Now, three months later, we’re still waiting to see if those concerns were valid. Walmart primarily imports from China, Mexico, Canada, India, and Vietnam—countries that have faced trade conflicts with the US. Despite these challenges, Walmart is committed to keeping its prices low and is expected to manage the tariff impacts better than many other retailers.

Predictions For Walmart’s Earnings

Analysts forecast that Walmart’s earnings per share will be $0.74, with total revenue estimated at $176.2 billion. In addition to these numbers, people will be closely watching Walmart’s view on US consumers and inflation. As Walmart prepares to release its earnings report, the actual figures might take a backseat to the company’s outlook. Investors are eager to hear how Walmart views the American consumer and ongoing inflation. Their insights will help us understand the retail landscape for the remainder of the year. Right now, the situation is uncertain, with new trade talks causing worries about import costs. The latest Consumer Price Index from July 2025 shows inflation rising again to 3.4%, which is putting pressure on family budgets. This makes Walmart’s comments about its pricing strategy very important for the market. If we look back at the trade disputes from 2018-2019, we can see how Walmart managed similar challenges. At that time, the company used its large scale to absorb some of the tariff costs and effectively manage its supply chain. Traders are paying attention to see if Walmart can be as resilient in today’s slightly different economic situation.

Market Implications

Recent data has made us cautious, as the Conference Board’s Consumer Confidence Index dropped to 99.5 last month. This small decline in optimism suggests that consumers may be becoming more selective with their spending. How Walmart sees this trend in its stores will be a significant indicator for the wider economy. In the options market, there has been a big increase in implied volatility for Walmart’s weekly and monthly contracts. This suggests that traders expect larger-than-normal changes in the stock price after the earnings report. This situation is perfect for strategies like straddles, which benefit from substantial price swings in either direction. Traders with specific opinions will be taking positions based on their views. Those who believe Walmart will showcase its defensive strength may buy call options or sell bullish put spreads. On the other hand, traders anticipating consumer weakness might buy puts as a safeguard against a possible downturn. Create your live VT Markets account and start trading now.

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Data releases have increased today, especially during the European trading session. Flash PMIs for major European economies have been revealed. While Eurozone PMIs might not significantly impact market prices or the ECB, UK PMIs could influence interest rate expectations if there are considerable differences from forecasts.

US Data Highlights

In the American session, the focus shifts to US Jobless Claims and US PMIs. Initial Jobless Claims are expected to be 225,000, a slight increase from the previous 224,000. Continuing Claims are projected at 1,960,000, up from 1,953,000. Claims offer a timely view of the job market, showing a trend of “low hiring, low firing.” This information will be crucial before Powell’s speech, as the Fed is closely monitoring job market conditions. US PMIs are expected to slightly decline, with Manufacturing PMI forecasted at 49.5, down from 49.8, and Services PMI at 54.2, from a previous 55.7. Traders will pay particular attention to details about employment and inflation in these reports. After the European data release, attention turns to the UK, where the Services PMI is reported at 51.5. This is below expectations and suggests a quickening of economic cooling. Such a deviation could prompt the market to bet on an earlier-than-expected rate cut from the Bank of England. Traders should prepare for increased volatility in UK assets, making protective put options on the FTSE 100 a strategy worth considering in the coming weeks. Shifting back to the US, the weekly jobless claims figure came in at 230,000, slightly above the forecast of 225,000. While not a major miss, it adds to a subtle upward trend observed since June 2025, suggesting that the “low firing” environment may be slowly eroding. This gradual rise in claims indicates a potential increase in market uncertainty, possibly driving traders to buy short-dated VIX call options ahead of upcoming Fed commentary.

Market Strategies and Implications

US PMI reports further highlight the slowdown, with manufacturing at 49.2 and services at 53.8, both below expectations. We are closely monitoring the employment component in the services report, which has dropped to its lowest level this year. This reinforces the signal from jobless claims and may lead traders to consider using SOFR futures to bet on a more dovish Federal Reserve stance as the year ends. We recall that the labor market’s surprising strength throughout 2024, with unemployment remaining below 4%, kept the Fed on a hawkish path. However, the current data from August 2025 indicates that this resilience may be weakening after a long stretch of strict policies. This shift suggests that option strategies like straddles on the SPY ETF could effectively trade the potential for sharp market moves in either direction. Create your live VT Markets account and start trading now.

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In early European trading, Eurostoxx futures stayed flat, showing a cautious market. UK stocks were the only bright spot yesterday, despite overall market hesitation. US tech shares faced more pressure after the Fed released minutes that were not as soft as expected. However, late buying offered some relief to the market. Today’s mood remains cautious, with US futures staying flat.

Focus on Walmart’s Earnings

Investors are eagerly awaiting Walmart’s earnings report, set to release shortly before US trading begins. This report will be important for traders looking for direction in this subdued market. European futures are barely moving this morning. The VSTOXX volatility index remains around 18.5, indicating that traders expect some fluctuations but not a full-blown crisis. This indecision makes selling out-of-the-money call and put options on indices like the Euro Stoxx 50 a good strategy to earn premiums while the market drifts. The recent Fed minutes remind us of the rate-hike cycles from 2022-2023 that hit tech stocks hard. With the latest July 2025 CPI data showing sticky inflation at 3.4%, the pressure on growth sectors is strong. It might be wise to buy protective puts on tech-heavy indices or set up bear call spreads to guard against further losses.

Opportunities in UK and US Markets

The UK’s strength is not a coincidence; it follows the Bank of England’s indication of a possible rate pause last month. This creates an opportunity for pairs trading—buying FTSE 100 futures and shorting sensitive US tech indices. All eyes are on Walmart’s earnings, which will give crucial insights on US consumer strength, especially after Q2 retail data showed some concerns. While the market seems stuck, the late-session buying we saw on Wall Street shows dip-buying interest still exists. This back-and-forth dynamic creates great opportunities for volatility plays. It may be smart to establish long straddles on stocks with upcoming catalysts or buy inexpensive, short-dated VIX call options ahead of next week’s central bank speeches. Create your live VT Markets account and start trading now.

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Switzerland’s trade surplus fell in July, dropping to CHF 4.59 billion from CHF 5.79 billion. This decrease happened due to a 1.2% rise in imports and a 3.8% drop in exports. The trade data for July shows a noticeable shrinking of our surplus, mainly because of the 3.8% decline in exports. This suggests that global demand is weakening, especially for our high-value goods like pharmaceuticals and watches. This situation is likely putting negative pressure on the Swiss franc.

Caution from the Swiss National Bank

This weak export number makes the Swiss National Bank (SNB) more cautious. With their next policy meeting set for September 18th, this data makes it less likely for them to raise interest rates. The SNB has been concerned about the strong franc, and this report confirms those worries. In the coming weeks, we believe it makes sense to prepare for a weaker franc. Buying call options on currency pairs like USD/CHF or EUR/CHF that expire after the September SNB meeting can be a way to benefit from this outlook. This strategy has potential for gains while keeping risks well-defined and limited. This perspective is supported by the latest manufacturing PMI data from the Eurozone, which showed a contraction at 48.5. This signals ongoing weakness in our largest export market. While Swiss inflation was still at 2.1% earlier this month, the SNB is likely to focus on the increasing risks to economic activity. We saw a similar situation in late 2024 when a strong franc started to negatively impact growth.

Effect on the Swiss Market Index

We also need to think about how this affects the Swiss Market Index (SMI), which has a strong focus on large exporters. A potentially weaker franc could benefit the earnings of companies like Nestlé and Roche. Therefore, options strategies that are optimistic about the SMI while being negative on the franc might effectively leverage this situation. Create your live VT Markets account and start trading now.

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FX option expiries today highlight EUR/USD at the 1.1670 and 1.1700 levels. The 1.1670 level is close to important hourly moving averages of 1.1664-68, which may limit upward movement during today’s trading. The 1.1700 expiry could also act as a barrier, restricting price increases until US trading starts. Key events for the euro include French and German PMI data, while the dollar’s focus remains on news from the Federal Reserve.

Educational Opportunities

You can find educational resources for a better understanding of how to use this data in trading. InvestingLive also provides insights into current market movements. There is notable option interest at the 1.0800 level for today’s New York cut. This concentration is likely to act as a magnet, potentially limiting any upside for EUR/USD in the short term. Traders should monitor price action to see if it stalls around this key strike price as the expiry approaches. Reflecting back, during this time in 2021, we saw major option barriers clustered higher, near 1.1700. The trading landscape has changed since then, now focusing on a lower range. This shift highlights the dollar’s continuous strength over the past few years.

Market Expectations

This week’s flash PMI readings show a cautious outlook for the euro. The S&P Global Eurozone Composite PMI registered a contraction at 49.5, while the US reading stayed in expansion territory at 51.2, emphasizing the economic divide. This data suggests a weaker outlook for the euro. All attention is now on the Jackson Hole symposium starting tomorrow for insights on monetary policy. With the latest US CPI at a stubborn 3.5% and Eurozone inflation easing to 2.8%, we are on the lookout for any signals of policy divergence between the Fed and ECB. Derivative traders should prepare for potential volatility based on the central bankers’ comments. Create your live VT Markets account and start trading now.

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18 August 2025 – VT Markets is proud to announce the successful acquisition of its Securities and Commodities Authority (SCA) Category 5 license for its Dubai branch under license number 20200000299, which permits the regulated activities of introduction and promotion within the UAE. This marks a significant step forward in establishing VT Markets (Pty) LTD – Dubai Branch, referred to as VT Markets Dubai, as a trusted financial services player in the region.

The Securities and Commodities Authority (SCA) is the federal financial regulatory agency in the United Arab Emirates, ensuring transparency, market integrity, and investor protection in the country’s financial markets. This license empowers VT Markets to introduce and promote secure, transparent, and high-quality services to clients in the UAE, further solidifying its position as a trusted leader in the global trading industry,

“The acquisition of the SCA Category 5 license reflects our commitment to the highest standards of regulatory compliance. This achievement not only enhances our ability to operate in a secure, transparent, and compliant manner, but it also reinforces our position as a trusted financial services provider in a rapidly evolving market. As we continue to prioritize the integrity of our operations, this milestone strengthens our ability to offer our clients introductions to regulated and licensed financial institutions that will offer them a safe and reliable trading environment in this dynamic region,” shared Ahmed Ismail Iman, Head of Compliance, VT Markets Dubai.

The SCA license is a crucial part of VT Markets’ ongoing expansion efforts and plans to continue strengthening its presence and adding more licenses to its portfolio. As part of its vision, VT Markets plans to continue broadening its reach by securing additional licenses in strategic regions, ensuring its ability to offer regulated and compliant services worldwide.

About VT Markets

VT Markets (operating through its related or affiliated entities under the VT Markets brand umbrella) is a regulated multi-asset broker with a presence in over 160 countries as of today. It has earned numerous international accolades including Best Online Trading and Fastest Growing Broker. In line with its mission to make trading accessible to all, VT Markets offers comprehensive access to over 1,000 financial instruments and clients benefit from a seamless trading experience via its award-winning mobile application.

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The Asia-Pacific session was mostly calm, with little change in key asset classes. China and Kazakhstan are working to strengthen trade relations, while the EURUSD could reach 1.20 due to a weaker USD. The Russian central bank is considering changing interest rates due to rising inflation. GBP and EUR pairs may experience fluctuations ahead of PMI data. Gold futures are down as of August 21, 2025. The UN is calling for a ceasefire in Gaza, and Meta has paused AI hiring after a company reorganization.

Current Financial Partnerships

Today, the PBOC set a stronger USD/CNY mid-point at 7.1287, which was above expectations. CME and FanDuel are teaming up to provide event contracts for financial markets. Nomura is betting against the USD as the Jackson Hole event approaches, and Japan’s flash manufacturing PMI increased to 49.9. The PBOC is expected to set the USD/CNY rate at 7.1748. Nordea foresees a decline in USDNOK and an increase in EURNOK. The session remained stable with limited market movements, as previous Fed events didn’t have a significant impact. The AUD is the weakest currency today, with the EUR leading. The ASX200 rose by 0.68%, while the Nikkei fell by 0.49%. Oil prices increased by 0.35%, and gold prices decreased by 0.26%. Next, the focus will shift to flash PMI data from the EU, UK, and US, along with US claims data, before the awaited Jackson Hole symposium and Powell’s speech.

Market Uncertainty Before Jackson Hole

The market is quiet now, but we are anticipating the Jackson Hole symposium. The last Fed minutes seem outdated, as they do not reflect the recent significant changes in labor market data. This uncertainty may prompt us to consider buying volatility, as Powell’s speech could lead to a significant market reaction. We’ve seen similar situations before, like in August 2022 when Powell’s brief, stern speech caused the S&P 500 to drop over 3% in one day. Buying straddles on major indices like the SPX or on currency pairs like USD/JPY could be a wise approach to prepare for any sharp market movements. This strategy benefits from significant price changes, regardless of direction. There is a strong expectation that the US dollar will weaken, with some analysts predicting a EUR/USD target of 1.20. This outlook is backed by recent Eurozone CPI data for July 2025, which shows core inflation remaining steady at 2.8%, indicating that the ECB may need to maintain a hawkish stance longer than the Fed. We might look into buying EUR/USD call options to take advantage of this potential upward trend. We’re closely monitoring China after the PBOC set a stronger-than-expected reference rate for the yuan today. This decision follows China’s manufacturing PMI for July 2025, which was 49.5, signaling ongoing economic slowdown that the authorities are trying to control. The Australian dollar is already showing weakness today, so we could consider using put options on AUD/USD to navigate this regional uncertainty. In the short term, all attention is on the flash PMI data from the UK and Europe. We expect implied volatility to rise ahead of these reports, similar to what we saw before the significant drop in sterling after disappointing PMI results in late 2024. Purchasing short-dated options on GBP/USD could be an opportunity to capitalize on immediate price movements following the announcement. Create your live VT Markets account and start trading now.

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Lisa Cook, a member of the Fed’s board of governors, is facing pressure to resign due to mortgage fraud allegations. This push for her resignation comes mainly from US President Trump, who may see a political opportunity in this situation. This issue is part of Trump’s larger plan to reshape the Fed by replacing individuals within the organization. Despite this political turmoil, markets have remained steady after the Fed released minutes focusing on inflation concerns, although this happened before the disappointing jobs report on August 1.

Fed Minutes and Market Stability

The released minutes do not capture the growing dovish feelings within the Fed. However, the Fed’s core stance remains strong, which increases the pressure on their messaging ahead of the FOMC’s blackout period that starts on September 6. As these events unfold, Cook’s situation could draw more attention. There are concerns that Trump’s influence might gradually weaken the Fed’s independence, which could impact market confidence in US financial assets. The political pressure on Fed Governor Lisa Cook is creating uncertainty. This comes at a time when the Fed’s minutes may be outdated, as they do not reflect the poor jobs report from August 1st. That report showed only 50,000 jobs were added, much lower than expected. This is leading the market to expect the Fed will become more dovish. This shift is seen in interest rate derivatives. The CME FedWatch Tool now shows a 60% chance of a rate cut in September, up from just 20% before the disappointing job data. This makes any statements from Fed officials critical in the next two weeks leading to the September 6 blackout period.

Market Volatility and Political Interference

The conflict between political pressure and weak economic data is increasing market volatility. The VIX, which measures expected market turbulence, has risen from about 14 in July to over 19. This suggests traders are actively seeking protection. Options traders might want to consider buying VIX calls or out-of-the-money puts on major indices as a safeguard against sudden market fear. Looking back, we remember President Trump exerting similar pressure on the Fed during his first term, especially against Chair Powell in 2018. Eventually, the market began to account for this political risk, and we may be seeing the start of a similar situation now. The gradual erosion of the Fed’s independence often raises questions about the long-term value of the US dollar. As a result, some investors are shifting towards traditional safe havens. Gold futures have quietly risen over 3% this month, indicating a move towards safety. It could be a wise strategy to consider positioning for further gains in gold through futures or options on gold-related ETFs, especially if trust in US institutions continues to diminish. Create your live VT Markets account and start trading now.

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A recent Reuters poll from August 21, 2025, asked economists about the Bank of Japan’s (BOJ) interest rate decisions. Most of them, about 92%, believe there will be no changes in the next policy meeting in September. Yet, 63% think the BOJ will raise rates to 0.75% in the fourth quarter of 2025, up from 54% last month. Among the 40 economists who provided a timeline, 38% expect the change in October, 18% in December, and 30% in January next year. Additionally, 22 out of 29 economists support the US-Japan trade deal. However, 21 of 31 are worried about increased fiscal pressure after the Liberal Democratic Party’s loss in the upper house elections. Currently, markets anticipate about a 17 basis point rate hike by the end of the year. The BOJ’s current leadership tends to prioritize caution, focusing on avoiding risks instead of making bold moves.

Consensus Opportunity And Pressure

Economists are increasingly agreeing on a BOJ rate hike to 0.75% by the end of the year. However, interest rate markets are only factoring in a much smaller hike of 17 basis points. This mismatch highlights a clear opportunity. Strong economic data is putting pressure on the BOJ to act. Japan’s core inflation for July 2025 remains above the BOJ’s 2% target, sitting at 2.5%. This is supported by significant wage growth, with final figures from the 2025 Shunto negotiations showing raises over 5% for the second consecutive year. These elements make it harder for the BOJ to keep its current policy. As we approach the September policy meeting, over 90% of economists expect no changes. This consensus might indicate that short-term options on Japanese government bonds or the yen could be pricing in too much risk. Traders might consider strategies that benefit from this expected stability in the coming weeks.

The Fourth Quarter Focus

The focus should turn to the fourth quarter, especially the October meeting, which is considered the most likely time for a rate hike. With the yen currently weak, around the 158 level against the dollar, a rate increase would help strengthen the currency. The difference between the market’s 17 basis point expectation and a potential 65 basis point increase to 0.75% presents a trading opportunity. However, we must remember that under Governor Ueda’s leadership, the BOJ tends to be careful. Their historic decision to end negative interest rates in March 2024 was a well-managed and small step. This history suggests that while a rate hike is indeed on the way, preparing for a single, aggressive move might not be the best strategy. Instead, be ready for a gradual tightening process. Create your live VT Markets account and start trading now.

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