During the European session, the only data released will be from Swiss consumer confidence, but it is not expected to impact the market significantly. In the American session, the focus shifts to the Canadian employment report. Analysts predict that 13,500 jobs will be added in July, a big drop from the 83,100 jobs added previously. The unemployment rate is expected to rise from 6.9% to 7.0%.

Bank of Canada Holds Steady

The Bank of Canada has stopped making changes as inflation is back near the high end of their 1-3% target. Current data does not show a need for additional rate cuts right now. The market sees a 61% chance of a rate cut in December. Unless upcoming data shows major surprises, this expectation is unlikely to change much. With the focus on North America today, August 8, 2025, the Canadian employment report is central. The forecast is for a modest report, with only 13,500 new jobs expected—a significant decline from last month’s total. This suggests that unless the numbers vary greatly, the market reaction may be muted. Since little volatility is expected in today’s data release, implied volatility for Canadian dollar options might decrease if the numbers match forecasts. Traders might find an opportunity to sell volatility using strategies like short straddles on the USD/CAD pair. The goal would be to earn the premium as option values decline in a stable market.

Market Strategies in Focus

This viewpoint aligns with the Bank of Canada’s current policy of holding steady. With the latest Consumer Price Index (CPI) inflation figures for July 2025 at 2.9%, inflation is at the upper end of the Bank’s target range. This leaves little reason to signal a near-term rate cut, stabilizing the currency for the moment. However, a surprising drop in jobs, such as a negative employment report, could change things quickly. This would likely increase the current 61% likelihood of a December rate cut and might even push it earlier. In that case, we could see the Canadian dollar weaken, making long USD/CAD positions or buying CAD put options smart strategies. Conversely, a strong jobs report could have a greater impact by challenging the dovish outlook. A quick look back to spring 2025 shows how a surprise surge in jobs led to a sharp rally in the Canadian dollar. If this strength repeats, it could wipe out rate cut expectations for the year and push USD/CAD down sharply. In the coming weeks, we’ll closely watch how Bank of Canada officials respond to today’s employment data. The figures will set the tone, but their insights will shape market expectations for the rest of the quarter. Any signs of growing concern about weak growth or ongoing inflation will guide our trading positions. Create your live VT Markets account and start trading now.

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The EUR/USD is currently trading around 1.1650. It is caught between significant expiries at 1.1600 and 1.1700, which may limit big movements today. The AUD/USD is hovering near 0.6500. The presence of expiries is likely to keep the price steady, suggesting it will stay close to this level until the expiries are cleared.

Strength of the Pound Against the Euro

EUR/GBP is at 0.8675 after a decline, as the pound gained strength following a hawkish signal from the Bank of England (BOE). The current trading is supported by expiries and the 200-hour moving average around 0.8680, which may keep trading steady during European hours. Large options are currently keeping EUR/USD in a tight range, indicating uncertainty. This aligns with recent data that shows Eurozone inflation decreased to 2.1% in July 2025. Meanwhile, the latest US jobs report was solid but not strong enough to influence the Federal Reserve’s decisions. Over the next few weeks, it seems likely that the 1.1600-1.1700 range will hold, making low-volatility strategies like selling strangles appealing. The significant expiry at 0.6500 for AUD/USD is acting as a strong anchor today. This reflects a balance of negative and positive factors for the Australian dollar. We noted weaker industrial data from China last month, but iron ore prices have stabilized around $110 a ton, providing some support. Given the volatility of 2023, traders may treat this 0.6500 level as a pivot point for range-bound trades in the short term.

Policy Divergence Between the BOE and ECB

For EUR/GBP, the options at 0.8675 are creating a pause after the recent decline. This drop was influenced by the BOE’s greater concern about inflation compared to the European Central Bank (ECB). Recent UK CPI data for July 2025 showed a stubborn 3.5%. This difference in policy suggests that the easiest path is downward for the pair, so we may see this stability as a chance to position for further strength in the pound over the coming weeks. Create your live VT Markets account and start trading now.

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Eurostoxx futures were flat in early European trading, showing a cautious mood after recent gains in European stocks. German DAX futures stayed the same, French CAC 40 futures increased by 0.1%, and UK FTSE futures remained unchanged. Wall Street’s drop overnight was balanced by strong tech shares. This week, European indices, including the DAX, have performed well, nearly recovering last week’s decline of over 3%. Looking ahead, ongoing trade talks between the EU and the US, along with the European Central Bank’s upcoming outlook, will shape market trends.

European Markets Pause

European markets are taking a breather after a strong recovery this week, with the German DAX making up for last week’s losses. This quiet trading is common in August, but low trading volume can lead to sudden changes. The Euro STOXX Volatility Index (VSTOXX) has come down to around 18 after hitting over 25 last week, indicating that some uncertainty still lingers. The European Central Bank’s next decision after its summer break is a significant focus right now. The recent Eurozone CPI reading for July 2025 was a stubborn 2.8%, putting pressure on the ECB to keep its tough approach. This scenario makes long-dated call options risky, while strategies like collars or put spreads on indices like the DAX may provide a buffer against a hawkish surprise in September. We are also closely monitoring the upcoming EU-US trade negotiations that are set to resume next month. With approximately $50 billion in potential tariffs still under discussion, sectors such as automakers and industrials are particularly vulnerable. Traders might think about buying puts on these sector-specific ETFs to protect themselves from negative news from the talks.

Central Bank Meetings

We experienced a similar trend in the summer of 2023, where a quiet August led to a volatile September due to central bank meetings and new policy signals. For now, with significant events approaching, traders should consider selling short-term options to earn premiums from the current calm. This capitalizes on time decay while waiting for clearer market direction following the summer lull. Create your live VT Markets account and start trading now.

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Gold spot prices remain steady, even with a rise in COMEX futures caused by unexpected tariffs that have taken the market by surprise. These tariffs make gold pricier in the US than overseas, leading to a rare price difference between COMEX and London Metal Exchange (LME) futures. Gold shipped from London to the US has to be refined in Switzerland to match COMEX bar size requirements. This refining is costly due to the tariffs, which raises gold prices in the US. Switzerland is vital in this process, refining 90% of gold from industrial mines, further complicating the situation.

Market Uncertainty

There is uncertainty in the market as the gold rush seen in January and February has not continued. Companies like UBS warn of possible funding stress due to the tariffs. Although the situation is dynamic, gold lease rates have not significantly changed and are sitting at about -0.18%. Gold prices are around $3,392, while COMEX futures are rising as traders evaluate the scenario. A key question is whether the US is acting intentionally or making a mistake. Clarifications from the Trump administration could affect future prices and may lead to a revaluation of US Treasury-held gold, impacting the supply chain. Should demand rise, it could also lift spot prices as the market adjusts. As of today, August 8, 2025, the widening gap between COMEX and London gold prices is a critical indicator. COMEX futures for December delivery are trading at over $75 more than the London spot price, a difference not seen since the supply chain issues of 2020. This points to a significant structural problem in the US market from the unexpected tariffs. This situation opens up a clear arbitrage opportunity but also highlights significant delivery risks. The tariffs increase the cost of bringing gold to the US, especially since most needs to be recast in Switzerland. Recent data shows that open interest on COMEX has surged by 8% in the first week of August, indicating that traders are getting ready for a possible squeeze.

Risk Management Options

Given the uncertainty around the Trump administration’s intentions, using options is a wise way to manage risk. Implied volatility for gold options has spiked, with the Cboe Gold Volatility Index (GVZ) reaching its highest level since March 2025’s market jitters. Buying call options or call spreads allows traders to take part in a potential price surge while limiting losses. A similar, though smaller, disruption occurred in spring 2020 when the pandemic halted flights and disrupted the physical supply chain. Back then, the COMEX premium surged as traders raced to acquire physical bars for delivery against futures contracts. Now, the disruption is political, which may prolong the situation and result in more significant outcomes. Despite the rise in futures, gold lease rates remain low, with the one-month forward rate around -0.18%. This suggests there is currently no panic for physical gold in London, and large institutions still have supply access. A sudden increase in these rates would signal a genuine physical shortage in the market. If this is a calculated US strategy to revalue Treasury reserves, the current spot price of around $3,392 may just be the beginning. Such a move might force paper shorts to struggle to find physical gold for delivery. A speculative long position in far-dated COMEX futures could greatly reward those who believe this view. Create your live VT Markets account and start trading now.

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JP Morgan now expects the Federal Reserve to cut interest rates multiple times this year. They predict three rate cuts of 25 basis points each, starting in September. This is a shift from their earlier expectation of just one cut in December. At first, JP Morgan forecasted 50 basis point cuts in the first quarter of 2026, but they’ve changed their outlook. This update is due to worsening conditions in the labor market, and many analysts are starting to agree with this view.

Fed Funds Futures Expectations

Currently, Fed funds futures indicate about 59 basis points of rate cuts by the end of the year. JP Morgan’s projections suggest a more cautious approach, likely to gain support if employment data weakens in the third quarter. There is an increasing belief that the Federal Reserve will begin to cut interest rates more swiftly, possibly starting in September 2025. This outlook stems from a declining labor market, indicating the economy is slowing down quicker than expected. For traders in derivatives, this speeds up the timeline for preparing for lower interest rates. This cautious perspective is backed by recent economic data. The July 2025 jobs report showed only 155,000 new non-farm jobs, while the unemployment rate rose to 4.1%. Coupled with core inflation dropping to 2.8%, the Fed has stronger reasons to ease its policies. Short-term interest rate (STIR) futures are already reacting, especially in SOFR contracts for the coming months. The prices for September and December 2025 SOFR futures have been rising, indicating market expectations of lower rates. Traders should keep in mind that while 59 basis points of cuts are priced in, a scenario with three cuts could lead to even more movement in these contracts.

Options on Bond ETFs

Options on bond ETFs, like the iShares 20+ Year Treasury Bond ETF (TLT), provide another way to take advantage of this trend. Buying call options on TLT allows investors to bet on increasing bond prices (and falling yields) with limited risk. Bond market volatility, indicated by the MOVE index, has been around 110, signaling that significant price changes are expected as the September Fed meeting approaches. We can look back to the summer of 2019 for a similar situation, when the Fed shifted from tightening to easing. In the months leading up to the first rate cut in July 2019, traders who prepared for falling rates enjoyed significant profits. History shows that the time just before the first cut is often crucial for taking action. Create your live VT Markets account and start trading now.

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The tradeCompass strategy from investingLive.com provides insights into trading Ethereum and highlights a potential bullish scenario for ETH Futures. The current price is between $3,950 and $3,960, with a target of $4,400. This strategy takes a long-term view, differing from typical day or swing trading, and involves careful planning for entry and stop-loss placements. For entry, there are three key buy zones near the current price: $3,960, $3,947, and $3,937.5. Buying from these zones could lead to a reward-to-risk ratio of over 7 if the price hits $4,400. Recommended stop-loss levels are between $3,887 and $3,884, with a longer stop at around $3,813. If the price falls below $3,810, it may indicate a shift to bearish sentiment. In case the bearish threshold is crossed, target levels would shift to $3,762, $3,697, and $3,633. This strategy focuses on gradually building a bullish position rather than frequently taking partial exits. The tradeCompass framework is influenced by institutional trading levels, offering a structured approach for those interested in Ethereum’s upward potential. This guide is not financial advice and encourages responsible trading. For further analysis, visit investingLive.com. As of August 8, 2025, derivative traders should think about increasing their long position in Ethereum. This trade expects a move from the current $3,960 price up to a longer-term target of $4,400, requiring patience and a longer outlook than day-trading. Traders can scale into this bullish position by placing buy orders at strategic levels near the current price. An initial buy could be made at $3,960, with additional possible entries at $3,947 and $3,937.5. This layered method helps manage risk while aiming for the $4,400 target. Favorable macroeconomic trends support this bullish outlook. The latest Consumer Price Index (CPI) report from July 2025 shows inflation cooling to 2.9%, slightly below expectations. This suggests the Federal Reserve may keep interest rates steady, benefiting risk assets like Ethereum. There is also renewed interest from institutional investors, a key factor in late 2024’s market movements. Spot Ethereum ETFs have gained over $500 million in net inflows this week, a strong turnaround from minor outflows in late July. This influx indicates that larger investors are positioning for potential price increases. On-chain data points to a supply squeeze as well. More than 30% of circulating ETH is now locked in staking contracts, reducing the supply available on exchanges. This constrained supply, paired with rising demand, strengthens the case for price increases. To manage risk, it’s important to set a stop-loss at a level that would clearly invalidate the bullish plan. A primary stop-loss around $3,887 would keep us below the significant $3,900 level and important technical zones, allowing us to avoid being influenced by normal market volatility. The crucial line for this bullish outlook is $3,810. If the price drops and stays below this level, it would suggest sellers have taken control. In that case, we would look at potential downside targets of $3,762 and lower. Looking back, the current market structure is similar to the consolidation phase before the significant rally in late 2024. Ethereum futures open interest has risen above $15 billion, indicating that speculative interest is returning. However, stable funding rates suggest that this is driven by genuine demand instead of excessive leverage.

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Japanese stocks jumped after the U.S. agreed to change a tariff order, promising refunds on excessive duties. The Bank of Japan’s meeting notes showed discussions about possible rate increases. The yen weakened, with USD/JPY surpassing 147.30, though the dollar’s overall gains remained limited. New U.S. tariffs on large gold bars could disrupt the bullion market and strengthen COMEX’s pricing power. Federal Reserve Bank of St. Louis President Alberto Musalem and Bank of England Chief Economist Huw Pill are set to speak. UBS warned that tariffs on gold bars could upset the market. Japan’s Nikkei 225 index rose by 2% thanks to these positive tariff developments. The People’s Bank of China (PBOC) set the USD/CNY reference rate at 7.1382, while China’s SMIC reported strong ongoing demand. The Reserve Bank of Australia (RBA) is likely to cut rates by the end of the year.

Bank Of Japan’s Meeting Summary

The Bank of Japan’s meeting summary revealed mixed opinions on rate hikes amid ongoing inflation and trade risks. Japan’s household spending rose by 1.3% year-on-year in June. A tariff shock has reduced the oil demand growth forecast for 2025. The Bank of England is experiencing tensions as split votes influence the pound. U.S. tariffs on gold bars could affect the bullion market and lead to funding issues. In geopolitical news, Israel intends to recapture Gaza City. New U.S. tariffs on large gold bars directly challenge the London-based bullion market’s funding system. This move is likely to make it harder and costlier for those shorting gold futures on COMEX to find physical metal for delivery. We believe this could lead to significant short covering in the coming weeks. Traders might want to consider buying call options on December gold futures to take advantage of potential price spikes caused by this supply squeeze. Recent data from the CME Group indicates a 15% increase in open interest this week, signaling growing momentum. A similar situation occurred in the nickel market in 2022, leading to a historic price rise.

Foreign Exchange Market Dynamics

In the foreign exchange market, the Bank of Japan’s division on rate hikes keeps the yen weak. While some members favor a hike, the overall uncertainty suggests they will likely lag behind other central banks for now. This difference in policy is pushing USD/JPY higher, and we expect this trend to continue approaching the 150 level. The latest Commitment of Traders report from the CFTC indicates that speculative net short positions against the yen are at their highest in over a year. This situation echoes the depreciation of the yen seen during the Bank of Japan’s slow approach between 2022 and 2023. Buying USD/JPY call options could be a smart way to capitalize on this ongoing policy gap. For equities, the resolution on tariffs is a clear boost for Japan, easing a major concern for exporters, particularly automakers. The 2% rise in the Nikkei 225 reflects significant investor relief. We anticipate further gains for Japanese stocks in the near term as this clarity settles in. The news that global oil demand growth for 2025 is now forecasted to be less than half of previous estimates is a strong negative indication. This “tariff shock” is expected to hamper economic activity. A look back at the U.S.-China trade war of 2018-2019 shows a comparable impact on energy consumption. Given this outlook, buying put options on WTI or Brent crude futures seems like a rational strategy. Weekly inventory reports from the Energy Information Administration revealed an unexpected increase in crude stockpiles, suggesting a slowdown in demand may already be happening. Create your live VT Markets account and start trading now.

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The Chief Economist of the Bank of England, Huw Pill, will share the central bank’s new forecasts and policy decisions online. This event will take place on Friday, August 8, 2025, at 11:15 GMT. In the August meeting, the Bank of England lowered the bank rate by 25 basis points to 4.00%. This news has given some support to the GBP due to a split decision and expectations of slower rate cuts in the future.

The Decision’s Impact

Governor Bailey explained that pay growth was lower than expected, emphasizing the importance of not reducing the bank rate too quickly or too much. The atmosphere surrounding the Bank of England is becoming tense, and the split vote could lead to further gains in the pound’s value. While the rate cut to 4.00% was anticipated, the split vote shows a significant disagreement within the bank’s committee. We believe this is a “hawkish cut,” meaning the commentary is more assertive than the action. This suggests that further rate cuts will come slowly and based on data, which is why the pound is strengthening today. This cautious approach makes sense given the inflation situation. Although the headline CPI for July stayed close to the 2.0% target, the stubborn services inflation is still high at 5.7%. This ongoing price pressure explains why some policymakers are reluctant to lower borrowing costs too quickly.

Market Strategy and Outlook

Governor Bailey pointed out that pay growth has moderated to an annual rate of 5.8%, justifying today’s cut. This gradual easing is a welcome change from the rapid wage pressures seen in 2023. It gives the Bank more flexibility, but complacency is not an option. For derivative traders, the split decision suggests increased volatility in the coming weeks. One-month implied volatility for GBP/USD options has already risen above 8.5%, indicating market uncertainty about the Bank’s next steps. In this environment, buying options for bigger price movements could be a wise strategy. Given the hawkish tone, we are preparing for potential strength in the sterling against currencies with clearer easing, like the US dollar. Buying GBP/USD call options or setting up bull call spreads provides a defined-risk way to benefit if the pound continues to rise. We should pay close attention to Huw Pill’s speech later today for any hints that could support this optimistic outlook. Create your live VT Markets account and start trading now.

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Gold prices have hit an all-time high due to a mix of economic trends and market signals. This surge confirms that gold will be one of the best-performing assets of 2025. Rising trade tensions, especially the doubling of U.S. tariffs on imports from India, have made gold more appealing as a safe investment. As a result, gold prices in India reached ₹1.02 lakh for 10 grams. In the U.S., disappointing economic data has increased the likelihood of a Federal Reserve rate cut in September, now over 90%. This has pushed gold prices to $3,418 per ounce. At the same time, China’s central bank is boosting its gold reserves, driving global demand even higher. As gold prices exceeded the $3,400 resistance level, they have moved into new territory.

Citi’s Revised Forecast

Citi has updated its gold forecast for the next three months to $3,500 per ounce. The new U.S. tariffs on gold bars have affected gold flows, which could raise costs for buyers and tighten global supply. This uncertainty enhances gold’s attractiveness. Gold’s recent increase shows potential for long-term growth, with significant gains over the past months. Current COMEX Gold Futures are at $3,488.7 per ounce, approaching new highs. This analysis highlights how macroeconomic factors and market trends are driving the current rise in gold prices. Proper risk management is essential in this environment. With gold breaking above $3,400, we suggest that derivative traders maintain a bullish outlook. This movement is supported by a strong combination of technical indicators and essential market factors, signaling a strong upward trend. This is not just a short-lived spike but a continuation of a trend that has already delivered over 31% gains this year.

Weak Jobs Report Impact

The weak jobs report for July, which showed only +95,000 jobs added compared to the expected +185,000, was a critical factor. This shortfall, along with an increase in unemployment to 4.1%, has led to strong expectations for a Fed rate cut in September. A similar trend occurred in late 2023, when changes in Fed language caused gold prices to rally for several months. Demand from central banks, especially China, has been a key support for the gold market. After a pause in mid-2024, the People’s Bank of China resumed buying, adding 1 million ounces in the second quarter of 2025. This steady buying helps stabilize the market and absorb minor dips. Trade tensions are intensifying, and the new tariffs on imports from India and on gold bars are particularly important. During the U.S.-China trade war of 2018-2019, gold rose by over 25% as investors sought safety amid uncertainty. The current tariffs on physical gold could restrict supply even more, leading to a potentially explosive market situation. To express a bullish view, traders might consider buying call options on COMEX futures to capitalize on further price increases with limited risk. Traders are eyeing $3,550 and $3,600 strike prices for September and October contracts. Bull call spreads can also reduce upfront costs in this rising volatility environment. However, managing risk is vital at these new highs. With prices climbing over 20% in the past six months, the market could experience sharp declines with unexpected news. Traders should think about using defined-risk option spreads or set strict stop-loss orders on long futures positions to safeguard their capital. Create your live VT Markets account and start trading now.

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The U.S. has placed tariffs on large gold bars, specifically those weighing 1 kg and 100 oz, which affects gold from Switzerland and London. This move disrupts the gold market by making Swiss bars, accepted by COMEX for delivery, harder to access. This creates challenges for London’s bullion banking.

Supply Restrictions and Basel III Pressures

These tariffs limit the supply of gold available for delivery, creating more pressure on banks to hold physical gold according to Basel III standards. They also reduce how the LBMA can reuse gold bars as collateral and threaten Switzerland’s dominant position in refining, while boosting COMEX’s role in setting global gold prices. In London’s unallocated gold market, rehypothecation allows banks to use the same gold bar as collateral several times. The new tariffs complicate acquiring gold bars in the needed formats, essential for settlements, reducing leverage and liquidity in London. The London Bullion Market Association (LBMA) governs this market, establishing gold and silver standards for international trade. It oversees the clearing system for most wholesale gold trades, enabling major banks and traders to take on high leverage. However, with fewer deliverable bars available, its ability to provide liquidity and rehypothecate is weakened. The U.S. tariffs on specific gold bars are tightening the market. COMEX gold futures have surged past $2,550 an ounce, creating a significant gap between the London and New York markets.

Tariffs and Market Dynamics

For those trading derivatives, this indicates a bullish outlook in the upcoming weeks. The tariffs make it expensive for short sellers to deliver physical gold, pushing many to buy back at higher prices. Open interest in the front-month contract has dropped by 15% in the last two weeks, suggesting shorts are covering their positions. We are noticing a widening premium of COMEX futures over the London spot price, now exceeding $50. This spread shows the added cost and challenges of obtaining and shipping non-tariff-ed gold to New York. Trading this spread could be a smart strategy as logistical issues persist. The physical market data reflects this pressure. Since late July 2025, COMEX registered gold inventories have lost nearly 1.5 million ounces. This reduction in available supply gives buyers a stronger position to negotiate. This structural strain is causing a rise in implied volatility. The CBOE Gold Volatility Index (GVZ) is at its highest level since early 2023 during a banking crisis. Traders might want to buy call options for upside potential while minimizing downside risks. This situation mirrors the market disruptions of March 2020, when pandemic-related flight cancellations disrupted physical gold trading. Back then, the COMEX premium soared, benefiting those holding long futures. We may be witnessing the early stages of a similar scenario caused by these tariffs. Create your live VT Markets account and start trading now.

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