ASST stock has increased in value after merging with Strive Asset Management, creating a new asset management firm focused on Bitcoin. A $750 million private investment is earmarked for Bitcoin purchases, and rising short interest has boosted investor confidence. The goal of the merger is to establish the first public asset-management firm with a Bitcoin treasury strategy. This led to speculation and a rise in stock price, as reported by GlobeNewswire, sparking renewed interest in the market. The $750 million private placement is set at $1.35 per share. If warrants are exercised, total investment could reach $1.5 billion, further concentrating on Bitcoin acquisition and enhancing market trust. In July, an updated merger agreement sparked more interest and buying activity among traders, as highlighted by Benzinga. ASST’s public float stands at about 14.9 million shares, with a short interest rate of 31%. This situation often results in short squeezes, where buyers force short sellers to cover, causing rapid price changes, according to MarketBeat. An upgrade in analyst ratings to “Hold” has also improved the stock’s momentum, as noted by MarketBeat. InvestingLive.com indicates that a price move above $4.80 may signal continued positive momentum. Due to the intense speculation surrounding the ASST merger, implied volatility in options has spiked. This makes options pricier but shows that the market expects significant price swings in the coming weeks. Traders should prepare for major movements instead of expecting steady price levels. For those optimistic about ASST’s future, purchasing call options with strike prices just above the $4.80 resistance level seems popular. There has been a notable increase in open interest for September and October $5 and $7.50 calls, suggesting traders believe the merger excitement and Bitcoin purchases will drive the stock price even higher. This strategy could yield substantial profits if the stock rises as expected. The potential for a short squeeze is significant and should not be overlooked. Recent data shows short interest has climbed to nearly 33% of the public float, setting the stage for a sharp price rally with any positive news. This mirrors the major short squeezes seen in 2021, where forced buying by short sellers led to sharp price increases. This positive outlook is bolstered by the overall performance of the cryptocurrency market. Bitcoin has regained strength, stabilizing above the key $95,000 mark after a brief dip in early July 2025. A strong Bitcoin price provides direct support for ASST’s treasury strategy, making it more appealing for new investors. On the other hand, traders who feel the rally might be overdone could think about buying put options. If the merger faces delays or if the stock doesn’t break and stay above $4.80, falling implied volatility may cause the stock price to drop sharply. Puts offer a way to profit from such declines or serve as a hedge for long positions. A more neutral approach could be to capitalize on volatility by buying a straddle, which involves purchasing both a call and a put option at the same strike price. This strategy benefits from significant price movements in either direction, which seem likely under current conditions. However, due to high option premiums, the stock must move considerably for this trade to be profitable.

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The latest ZEW survey data, released on August 12, 2025, shows that Germany’s current economic conditions index is at -68.6, lower than the expected -65.0. This is a decrease from the prior index reading of -59.5. The economic outlook index stands at 34.7, below the anticipated 39.8, and down from the previous 52.7. The drop in outlook is mainly due to disappointment among financial market experts regarding the recent US-EU trade deal, which particularly affects the chemical and pharmaceutical sectors. The ZEW data highlights our concerns about the health of the German economy, showing a significant miss in expectations. The figures for both current conditions and the six-month outlook indicate a worsening slowdown rather than a temporary issue. We are already seeing the EUR/USD pair fall below the important support level of 1.0500 due to this news. The disappointment came from the much-anticipated US-EU trade partnership announced in June, which has not benefitted key German industries as expected. We should pay attention to the struggles in the chemical and pharmaceutical sectors, which were specifically noted as under pressure. For example, shares of chemical giant BASF have already dropped 4% in pre-market trading, reflecting this negative sentiment. This weak sentiment follows last week’s report on German industrial production, which showed a 1.2% decline in July. With two consecutive quarters of negative growth looking more likely, we are confirming that a technical recession is underway. This situation resembles the industrial fragility seen in 2023 when the economy struggled to recover from earlier energy price shocks. In reaction to these developments, we are considering buying put options on the DAX index to prepare for further declines ahead of the September expiry. Implied volatility on these options has increased from 18% to over 22% in the past hour, indicating the market is adjusting to higher risk. Traders holding long positions in German stocks should think about using these options to protect against ongoing sell-offs. For currency traders, shorting the Euro against the US Dollar remains the best strategy to capitalize on this specific weakness in Germany. This data poses a challenge to the European Central Bank’s recent efforts to signal a pause in its easing measures. We can anticipate renewed discussions about further rate cuts before the year ends, which would likely put additional pressure on the euro.

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InvestingLive.com provides valuable insights into Nasdaq futures by analyzing order flow data from the last five days and the recent premarket hours. While their AI can help guide decisions, personal research is highly recommended. In the past five days, Nasdaq futures began with a bearish trend, experienced three bullish sessions, and then slowed down. On August 5th, the market showed slight bearishness, with resistance at highs and support at lows. From August 6th to 8th, it closed higher, showing that buyers were resilient against downturns. However, on August 11th, momentum slowed, meeting significant selling pressure at 23,800.

Pre-Market Dynamics

During pre-market hours, buyers initially defended prices but faced aggressive selling later. By mid-morning, buyers were firm at 23,630–23,643. However, late pre-market activity saw resistance at 23,664, limiting upward movement. Key levels for Nasdaq futures are support at 23,630–23,643 and resistance at 23,664. Upside targets range from 23,686 to 23,763. The price outlook is mildly bullish, rated at +3. A rise above 23,664 may lead to further increases, while a drop below 23,630 could indicate lower levels. Order flow is crucial as it reveals market transactions and the balance between buyers and sellers. InvestingLive utilizes this information to spot market shifts, giving traders an edge without providing direct financial advice. They also share more insights through a free Telegram channel. We believe the Nasdaq shows an upward structure but is currently facing a tough challenge. After a strong rally last week, momentum has slowed. Sellers have created a tough ceiling around 23,800. The key battleground is at 23,630 for buyer support and 23,664 for seller resistance.

Economic Backdrop

This market tension exists amid positive economic data. The latest Consumer Price Index (CPI) report from July showed inflation cooling to 3.1%. This eases pressure on the Federal Reserve to make aggressive policy changes, generally benefiting tech stocks. The labor market also shows signs of balance, reinforcing positive sentiment. The non-farm payrolls report from July, released on August 1st, indicated a moderation in hiring to 190,000 jobs, alleviating fears of an overheating economy. This suggests a favorable “goldilocks” environment for traders in the near term. With the trading range tightening, traders might explore strategies that profit from low volatility, such as selling out-of-the-money call and put options. An iron condor strategy could work well if the Nasdaq remains steady between key support and resistance levels. This approach allows traders to earn premiums while awaiting the market’s next direction. Market volatility mirrors this calm. The CBOE Volatility Index (VIX) currently hovers around 14.5, a notable drop from above 18 levels during past market jitters in August 2024. With lower implied volatility, buying protective put options as a hedge against a drop below 23,630 is more cost-effective than it was a year ago. For those anticipating a breakout, a consistent move above 23,664 would signal an opportunity to act. Traders could then consider buying call options or implementing bull call spreads to target resistance levels around 23,735 and 23,763. On the other hand, if 23,630 support is broken, bearish strategies could target 23,600. Looking ahead to the following weeks, all attention will be on the Federal Reserve’s next meeting in September. Traders should be aware of options expiration dates and anticipate increased volatility as the meeting approaches. The current stability may just be a calm before a significant market shift. Create your live VT Markets account and start trading now.

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Understanding expected inflation estimates is crucial because any changes from these expectations can surprise the market. It’s also important to look at how forecasts are distributed, as many forecasts often cluster near specific values, like the upper limit, which can impact market reactions.

Consensus Figures

The year-on-year consensus for the Consumer Price Index (CPI) is 2.8% (59%), while other percentages include 2.9% (14%) and 2.6% (2%). For monthly CPI, there’s a strong agreement at 0.2% (65%), with small differences elsewhere. Core CPI year-on-year consensus is 3.0% (61%), and the monthly figure is centered at 0.3% (73%). If these consensus numbers deviate significantly, it could lead to major market movements. For example, a Core CPI year-on-year of 3.2% could cause the US dollar to rally, while a number of 2.9% might result in a weaker dollar. Recent dollar strength likely involved protection against possible CPI changes, and the Federal Reserve seems to be increasingly focused on labor market data. To lower the chances of a rate cut in September, a Core CPI of at least 3.2% might be needed, especially with the Federal Reserve discussions anticipated at the Jackson Hole Symposium. When considering the upcoming inflation report, it’s crucial to not only look at consensus figures but also how closely forecasts are grouped. There’s strong agreement for Core CPI at 0.3% month-over-month and 3.0% year-over-year. Significant deviations from these numbers could lead to the largest market shifts. This report is particularly important due to the recent change in Federal Reserve focus. The weak Non-Farm Payrolls report from July 2025, which added only 155,000 jobs, has made the Fed more attuned to the job market. Consequently, futures markets are currently pricing in a 70% chance of a rate cut in September.

Market Implications

Given yesterday’s unexplained dollar strength, possibly a hedge against high inflation, the simplest trades are evident. A Core Y/Y reading of 3.2% would challenge the rate cut narrative and likely cause the dollar to rally. This would be a notable surprise, as only 2% of analysts predict this outcome. A similar situation happened in late 2023 when markets expected early and significant rate cuts. A series of stubbornly high core inflation numbers in early 2024 quickly caused a hawkish shift. A strong report now could trigger a similar reversal of current dovish sentiments. On the flip side, a Core Y/Y figure of 2.9% or lower would strengthen the disinflation trend and likely weaken the dollar. This result would confirm expectations for a September rate cut and could even prompt the markets to consider a third possible rate cut by the end of the year. Regardless of what happens, the market’s attention will quickly shift. We will be listening for comments from Fed officials about any changes in perspective. The upcoming Jackson Hole Symposium at the end of the month will be a significant event for shaping expectations. Create your live VT Markets account and start trading now.

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The EURUSD pair has dropped into an important support area as traders await the US CPI report. Recently, the market reacted to weaker Non-Farm Payrolls (NFP) data, shifting expectations from 35 basis points (bps) of easing to 57 bps by year-end. Positive data could prompt Fed Chair Powell to consider a rate cut in September.

Focus on US CPI

All eyes are on the US CPI report, which may impact decisions by the Federal Reserve. Some strength in the dollar was noted, likely because traders are positioning themselves ahead of this key event. Current statements from Fed officials indicate that a rate cut is likely unless the inflation data is unexpectedly high or the September NFP figure is strong. Regarding the euro, the US-EU trade deal has established tariffs at 15%, and European Central Bank (ECB) members are currently neutral regarding rate cuts. The market now anticipates only a modest easing of 11 bps by year-end, indicating that a rate cut is unlikely. On the daily chart, a significant resistance level of 1.1575 was surpassed but has since pulled back as the market awaits the CPI results. Buyers are hoping for a rally toward 1.1750, while sellers are looking for a decline to new lows. On the 4-hour chart, the 1.1590 support level is essential, with both buyers and sellers strategically positioned. The 1-hour chart offers little additional insight. Key upcoming data includes the US CPI report, followed by Producer Price Index (PPI), Jobless Claims, Retail Sales, and Consumer Sentiment. The comments from Fed officials will be especially important after the CPI data release.

Current Market Sentiment

As of today, August 12, 2025, the EURUSD is near a critical support zone around 1.1590 ahead of the US inflation data. Traders’ heightened anticipation has pushed the implied volatility on one-week EURUSD options up by over 15% in recent days. This indicates that significant price movement is expected, making strategies like straddles or strangles beneficial for capitalizing on potential breakouts. The weak US jobs report for July 2025, which added only 155,000 jobs instead of the expected 190,000, has notably shifted market sentiment. This has reinforced expectations of more than 50 basis points in Fed cuts by year-end. If today’s US CPI reading is at or below the consensus of 0.2% month-over-month, it will likely confirm expectations for a September rate cut and could lead to a rally towards the 1.1750 resistance. Conversely, a surprising inflation increase would challenge the dovish sentiment that’s been growing since early August. The market would need a significant beat on expectations for traders to rethink a September cut; thus, managing risk is crucial. Buying protective put options with a strike price below the 1.1575 support level offers a way to hedge long positions against a sudden dollar rebound. Looking ahead, the Jackson Hole Symposium at the end of August will be a significant event. Here, we expect Fed Chair Powell to clearly outline his plans for the September meeting. This timeline suggests that options expiring in late September may capture ongoing volatility as the market reacts to this week’s data and prepares for the Fed’s formal announcement. The ECB’s neutral position, with members showing little inclination to cut rates after their June 2025 move, creates a clear divergence in policy compared to the Fed. This scenario resembles 2019, when a proactive Fed and a hesitant ECB resulted in prolonged dollar weakness. This historical context suggests that any temporary dip in EURUSD caused by dollar strength could present a buying opportunity for a longer-term trend. Create your live VT Markets account and start trading now.

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Most analysts don’t see any risk in the upcoming US Consumer Price Index (CPI) report, but Jefferies thinks there could be issues. Many expect core inflation to rise about +0.3% month-over-month for July, while Jefferies predicts a smaller increase of +0.246%. They believe prices for furniture, clothing, and leisure goods will likely stabilize. For overall inflation, there’s an expected +0.172% month-over-month compared to a +0.20% consensus. Jefferies warns that there could be downside risks here too, even if the difference seems small. They highlight that airfare prices can be unpredictable, especially since premium cabin sales have a lesser impact on CPI. If basic economy fares remain flat and seasonal adjustments rise by 2.5%, it might not show in the expected results.

Jefferies’ View on Headline CPI

Jefferies suggests that without these adjustments, the headline CPI could drop to +0.1%. This contrasts with UBS’s view, which expects stronger inflation. The differing opinions of Jefferies and UBS show the variety of expectations before the data is released. More discussions will follow as the session unfolds. There is increasing speculation that the upcoming CPI report might come in lower than expected. While many anticipate a moderate reading, some analyses hint that core inflation could be around +0.2% for July. This belief stems from the idea that recent price increases in items like furniture and clothing may not happen again. Prices for used cars, which have driven inflation in the past, appear to have leveled off. Manheim’s July 2025 index data revealed almost no change, suggesting a potential decrease after adjustments. This view is backed by early travel data showing that premium airline cabin sales are hiding weaknesses in basic economy fares.

Market Reactions and Opportunities

This chance for a lower-than-expected print comes at a crucial time, as the Federal Reserve has kept interest rates steady since December 2024. Market anxiety is evident, with the VIX rising to 17 over the past week. A lower inflation number would likely give the Fed more leeway to consider rate cuts earlier than expected. One way to respond could be to prepare for reduced interest rate expectations and a possible rally in equity markets. This means buying out-of-the-money call options on major indices like the S&P 500 or Nasdaq 100 for the coming weeks. These options provide an affordable way to capitalize on significant, unexpected market rises if inflation comes in low. Another strategy is to anticipate a decline in market nervousness after the report by purchasing VIX puts. We saw a strong market rally in late 2023 when lower inflation prints confirmed that price pressures had peaked. A similar situation now could reduce volatility, making VIX puts a smart investment. If the Fed surprises with a dovish stance, it may weaken the U.S. dollar. Traders could consider buying put options on dollar-linked ETFs or call options on currencies like the Euro. This offers another opportunity to benefit from the market’s reaction to easing inflation concerns. Create your live VT Markets account and start trading now.

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**Gold Prices and Technical Analysis** Gold prices fell as the US dollar strengthened, likely due to traders preparing for the upcoming US CPI report. This report could sway market expectations ahead of the Jackson Hole Symposium, where there might be discussions about rate cuts. If the CPI figures come in lower than expected, this could foster a dovish outlook. Such a scenario might increase the chances of a rate cut by the end of the year. On the other hand, higher-than-expected numbers could lead to a hawkish stance, which may impact gold prices and keep them within a certain range. Despite this, gold’s long-term trend remains upward, mainly due to anticipated declines in real yields as the Federal Reserve eases monetary policy. In daily technical analysis, gold is nearing the 3,438 resistance level but has seen a recent drop. Sellers might target short positions near this resistance, while buyers may look for opportunities around the 3,245 support level. The 4-hour chart shows activity around the 3,340 mark, where renewed buying interest could spark activity. Sellers, however, might wait for a drop towards 3,245 support. The 1-hour view suggests that numbers from the US CPI report will greatly influence movements. Key economic indicators to watch this week include US CPI, PPI, jobless claims, retail sales, and consumer sentiment. Gold is pulling back as the US dollar strengthens, suggesting cautious positioning before today’s inflation data. There isn’t a clear reason for yesterday’s decline, indicating that traders are simply reducing risk. The market is holding its breath for the US CPI report and the subsequent comments from the Federal Reserve. **The Main Event** Today’s major event, August 12th, is the release of the July Consumer Price Index. Economists predict a year-over-year increase of 2.9%, a slight drop from the 3.1% seen in June. This suggests inflation is slowly improving. The CPI data will significantly impact expectations for the Federal Reserve’s upcoming Jackson Hole meeting. If the CPI falls below the 2.9% target, we can expect a surge in bets for a September rate cut. This could lead traders to buy call options or long futures contracts in anticipation of a rally toward the 3,438 resistance level. A lower inflation figure would likely trigger a strong rally as the market starts to price in a more aggressive easing cycle for the remainder of 2025. Conversely, an inflation rate above 3.0% would lead the market to reconsider its rate cut expectations. This could strengthen the US dollar and put downward pressure on gold prices, increasing the likelihood of a drop to the 3,245 support level. Traders might respond by purchasing put options or shorting futures to benefit from this hawkish adjustment. Looking ahead, the Jackson Hole Symposium at the end of August is a crucial event, where Fed Chair Powell might indicate future policy directions. His hawkish statements at the 2022 symposium had a significant market impact, emphasizing the importance of this year’s event for setting future policies. Any hint of a dovish shift could drive a more sustained rally in gold. **Economic Data and Long-Term Trends** Recent economic indicators have also shown some signs of softening, supporting the case for potential rate cuts. Weekly jobless claims have hovered around 250,000 in recent weeks, up from the lows of 2024. This gradual cooling of the labor market provides the Fed with more justification to consider easing. In the grand scheme, gold is likely to maintain an upward trend as the Fed is expected to lower rates, which would decrease real yields. Short-term pullbacks, driven by stronger-than-anticipated data, are likely to present buying opportunities within the broader uptrend. For long-term holdings, buying near the 3,245 support level offers a favorable risk-to-reward setup. For more immediate trades following today’s CPI release, keep an eye on the 3,340 level. If buyers step in to support this zone, it could offer a quick chance for a trade back toward the 3,438 resistance. However, if gold decisively breaks below 3,340, it would indicate that sellers are in control, paving the way for a decline to the crucial support at 3,245. Create your live VT Markets account and start trading now.

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European stocks opened slightly higher today. The Eurostoxx rose by 0.3%, Germany’s DAX by 0.1%, France’s CAC 40 by 0.5%, the UK’s FTSE by 0.2%, Spain’s IBEX by 0.5%, and Italy’s FTSE MIB by 0.5%. These movements set a positive tone for the morning. US futures remain steady after a slow performance recently. The S&P 500 futures increased by 0.1%. Everyone is waiting for the US CPI report, which will impact European trading this morning.

The Focus for the Coming Weeks

With the markets calm, all eyes are on the upcoming US CPI report. European indices like the DAX and CAC 40 have posted small gains, but this is likely just a calm before a potential storm. The key inflation data will determine the direction for risk assets. Expectations place US year-over-year inflation at around 2.8%, which is above the Federal Reserve’s target of 2%. Since the Fed has paused its rate cuts and lowered the benchmark to 3.75% earlier this year, a higher number might delay further cuts in 2025. This makes the market sensitive to any surprises. Implied volatility is rising, with the VIX index nearing 16, indicating traders anticipate significant market movements after the announcement. Options on the S&P 500 show that the cost of protection has increased in the past week, signaling a chance for those willing to trade the volatility. For derivative traders, this situation suggests strategies that take advantage of sharp movements in either direction. We might look into setting up straddles or strangles on major indices like the S&P 500 or the Euro Stoxx 50. This involves buying both a call and a put option to position for a breakout from the current tight trading range.

Market Reactions to CPI Prints

We remember how the market reacted to CPI prints in 2023 and 2024. A mere 0.1% deviation from expectations could cause a 2% swing in equities. The current setup feels similar, as central bank policies depend on these monthly reports. We should use the lessons from that time to manage our risks today. If US inflation comes in higher than expected, it will influence not just US markets but also the European Central Bank. The ECB has been closely following the Fed’s actions, and persistent US inflation could hinder hopes for another rate cut in Frankfurt this autumn. This makes short-term positions on European equities risky ahead of the data release. Therefore, we should review our portfolios for directional risk and consider hedging against potential unfavorable movements. The calm opening this morning shouldn’t be seen as stability. It’s an ideal time to prepare for the volatility we expect later this week. Create your live VT Markets account and start trading now.

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UBS expects inflation to impact the US economy in the fall. They forecast a core CPI increase of 0.35% month-over-month (m/m) and a year-over-year (y/y) rise of 3.11% in July. These are the highest estimates among analysts, with trends likely to strengthen as autumn approaches.

Tariffs and Core Inflation

Tariffs are expected to play a role, with core goods inflation predicted to reach 0.38% m/m after a 0.20% m/m rise in June. UBS anticipates further increases in the coming months: 0.60% in August, 0.76% in September, and 0.73% in October. Core services inflation is also projected to rise to 0.35% m/m in July, up from 0.25% m/m in June. Airfares and lodging prices are expected to rebound. Airfares dropped by 0.11% and lodging prices fell by 2.89% in June. UBS forecasts a 1.0% increase in airfares and a 0.90% rise in lodging prices away from home. Looking back to mid-2024, there were predictions of significant inflation growth heading into the fall. At that time, forecasts indicated rising core goods and services prices, driven by tariffs and increased travel costs. This created a tense market situation for the latter half of the year. Much of that forecast came true, with core inflation remaining high through the end of 2024. Official data shows Core CPI for October 2024 had a 0.5% month-over-month increase, delaying any changes from the Federal Reserve. We learned that price pressures can return quickly.

Interest Rate Futures and Market Volatility

The spike in inflation led the Fed to keep interest rates steady well into 2025, disappointing those hoping for quick rate cuts. There was notable volatility in interest rate futures as the market adjusted to a more hawkish outlook. This experience should guide our current market approach. Now, in mid-August 2025, we see a similar trend. The July CPI report showed year-over-year inflation rising to 3.4%, while the latest jobs report revealed the addition of 210,000 jobs. The Fed’s direction for the upcoming September meeting is again uncertain. Traders should consider purchasing protection against unexpected inflation news or a hawkish Fed. The VIX is currently around a relatively calm 15, making it an inexpensive option to buy call options against sudden market fear, especially since it surged over 20 during last autumn’s inflation surprise. Reviewing interest rate futures positions is wise, as the market may be overly relaxed about rates remaining high for a longer period. Traders could use SOFR futures to challenge the current expectations for rate cuts in early 2026, profiting if the Fed maintains a tight stance due to ongoing price pressures. We should also revisit themes from last year, such as services inflation. With summer travel demand in 2025 surpassing forecasts, airfare and hotel prices are rising again. Trading options on airline (JETS) or consumer discretionary (XLY) ETFs may be a good strategy to capitalize on this continuing inflation trend. Create your live VT Markets account and start trading now.

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