The US labor market struggled in July, adding only 73,000 jobs, much lower than the projected 110,000. Job numbers for May and June were also revised down, with a total drop of 258,000 jobs from previous reports.
Despite these changes, the job market is still considered stable. However, worries about inflation remain, which could influence economic decisions. As inflation continues to pressurize, there are concerns that tariffs may raise prices and further weaken the job market as the year ends.
Following the job market news, the US Dollar Index dropped 1.2% to 98.85. This decrease highlights the complexities of monetary policy decisions, with more updates coming before the Federal Reserve’s September meeting.
The Federal Reserve shapes the US economy using monetary policy aimed at stabilizing prices and ensuring full employment. It alters interest rates based on employment and inflation data, which impacts the value of the US Dollar. The Federal Open Market Committee meets eight times a year to assess the economy and make decisions accordingly.
Given the disappointing July jobs report and the downward revisions for May and June, the US economy appears to be slowing more than we previously thought. This downturn in the job market suggests a more cautious economic outlook in the coming weeks, prompting us to adjust our strategies for a potential downturn.
The Federal Reserve finds itself in a tough spot ahead of the September meeting. Recent data shows that the Consumer Price Index (CPI) for July 2025 remains high at 3.5% annually, yet the weak job numbers argue against raising interest rates further. We see a rising chance that the Fed might need to cut rates to bolster the job market despite inflation concerns.
This outlook is impacting currency markets, where the US Dollar Index has already dropped. We expect this trend to continue as traders anticipate a more dovish Federal Reserve. Therefore, we are considering derivative strategies that could benefit from a declining dollar, such as purchasing put options on major dollar ETFs.
The mix of slowing growth and ongoing inflation is likely to cause market volatility. We experienced similar sharp market changes in 2023 when the Fed faced the same challenges. We believe buying options on the VIX index is a smart way to protect against the uncertainty expected before the next Fed decision.
Based on market reactions, we are also focusing on interest-rate-sensitive assets. As the likelihood of a rate cut rises, futures contracts on long-term US Treasury bonds are becoming more appealing. Their prices should increase if the market continues to anticipate lower interest rates.
The Swiss Franc (CHF) rose against the US Dollar (USD) after the release of the July Nonfarm Payrolls report. The USD/CHF pair dropped nearly 1.0%, trading around 0.8045, as the US Dollar Index (DXY) fell from 100.26 to 99.30.
In July, the US economy added only 73,000 jobs, below the expected 110,000, marking the weakest performance of the year. Revised June figures showed just 14,000 jobs added. The unemployment rate went up to 4.2%, while wage growth stayed steady, increasing by 0.3% month-on-month and 3.9% year-on-year.
Mixed Manufacturing Figures
Manufacturing data was mixed. The S&P Global PMI slightly rose to 49.8, but ISM PMI dropped to 48.0, indicating a continued downturn. As a result, the chances of a rate cut in September jumped to 82.1%, signaling changing expectations.
New US tariffs on Swiss exports, totaling 39%, have raised concerns for key Swiss sectors like luxury watches and machinery. Switzerland’s economy heavily relies on exports, especially to the EU. While not major commodity exporters, Switzerland’s reputation as a safe haven ties it closely to gold and oil prices.
Today’s weak US employment report dealt a significant blow to the Dollar. The meager addition of 73,000 jobs suggests a slowdown, pulling the USD/CHF pair down towards 0.8045. This starkly contrasts with the job growth of over 150,000 per month throughout 2024.
This disappointing data has dramatically changed expectations for the Federal Reserve’s next steps. The likelihood of a rate cut in September has surged to over 82%, a sharp shift from the rate hikes that were in place until late 2023. This reinforces a bearish outlook for the US Dollar in the upcoming weeks.
Rising Market Uncertainty
Nevertheless, we must consider the new challenge for the Swiss Franc. The announced 39% US tariff directly affects major Swiss sectors critical to the economy. In 2024, Swiss exports of watches and machinery to the US were valued at more than $15 billion, making this a significant threat.
This creates a complex situation where the Dollar is weakening, but the Franc’s export strength is under pressure. Such circumstances can lead to volatility rather than a clear trend. Implied volatility on USD/CHF options has already increased by 20% in the last 24 hours, indicating market uncertainty.
Given this environment, buying options to take advantage of potential price swings may be wiser than simply betting on direction with futures. A long straddle strategy, which involves purchasing both a call and a put option at the same strike price, could be effective here. This strategy benefits from large price movements in either direction, leveraging the anticipated volatility.
We should also remember that the Franc often acts as a safe haven, drawing in capital during times of global uncertainty, which can push its value up. Historically, during crisis periods like the European debt crisis over a decade ago, significant CHF strength prompted the Swiss National Bank to intervene. This adds complexity and the possibility of sudden, sharp reversals.
Create your live VT Markets account and start trading now.
The S&P 500 dropped by 0.37%, closing lower after hitting a record high of 6,427.02. The latest Nonfarm Payrolls report showed an increase of 73,000, but this was below the expected 106,000. As a result, a 0.9% decline is anticipated when the market opens.
Currently, 40.3% of individual investors are feeling optimistic, while 33.0% have a negative outlook. S&P 500 futures are trading above 6,300, facing resistance around 6,350 and support between 6,250 and 6,300.
Volatility Breakout System
The Volatility Breakout System, which had a long position since June 3, switched to a short position with a gain of 363.94 points. This strategy aims to take advantage of significant market moves while avoiding daily fluctuations.
Crude oil prices also fell, now below $69 after a 1.06% drop on Thursday. U.S. tariffs and possible sanctions on Russian crude are key factors affecting the oil market.
Chevron reported a profit of $3.1 billion for Q2, surpassing expectations despite an 11% decline in crude prices. This success was driven by solid production numbers and reduced capital spending, showing the company’s strength amid market changes.
The market’s inability to maintain its record high, coupled with the disappointing jobs report, signals potential challenges ahead. The S&P 500’s drop seems to reflect concerns about a slowing economy, a trend we previously noticed during payroll misses in late 2024. Traders should view this not just as a short-term issue, but potentially as a shift in market direction.
Market Technical Signals
The shift to a short position by the Volatility Breakout System, after a successful long stretch, serves as a significant warning. The VIX, a measure of market fear, has surged over 30% this week, now trading above 17, indicating rising uncertainty. This may be a good time to consider put options for protection against further declines or to speculate on a drop toward the 6,250 support level.
While individual investor optimism remains above 40%, the market is not yet geared for a major downturn. However, if the S&P 500 futures break decisively below the 6,300 level, it could quickly change investor sentiment as bullish investors exit. We are closely monitoring order flows for signs of this potential downward acceleration.
Crude oil dropping below $69 a barrel highlights the weakening demand in the economy. The latest EIA report, which revealed an unexpected inventory increase of 1.8 million barrels, supports this slowdown and reinforces our cautious perspective. Ongoing geopolitical tensions surrounding Russian crude add another layer of volatility that traders need to watch.
Chevron’s strong profits, driven by effective operations, should not be confused with overall economic strength. The broader picture for derivative traders is shaped by macro data, which is currently trending downward. We believe that the weaknesses in job growth and energy demand will be critical indicators for market direction in the weeks ahead.
Create your live VT Markets account and start trading now.
The US nonfarm payrolls report for July showed an increase of 73,000 jobs, which was below the expected 110,000. There were major downward revisions for previous months. The unemployment rate rose to 4.2% from 4.1%. Notable revisions included a drop in May jobs from 144,000 to 19,000 and in June from 147,000 to 14,000. As a result, the BLS Commissioner was dismissed, with comments highlighting how data revisions can change perceptions.
Other economic indicators were also disappointing. US construction spending decreased by 0.4%, while no change was expected. July’s ISM Manufacturing Index fell to 48.0 from an estimated 49.5, and the University of Michigan’s sentiment index dipped slightly. Inflation expectations diverged, with one-year inflation rising to 4.5% and five-year expectations dropping to 3.4%.
Response to International Tensions
President Trump announced that nuclear submarines will be positioned in response to international tensions and introduced new tariffs on Canada and Switzerland. Major US stock indices, such as NASDAQ and Russell 2000, experienced declines, and US yields fell sharply. The USD weakened significantly, with the USDJPY down by 2.26%, and the EUR and CHF also declined against the dollar.
The Atlanta Fed’s GDPNow indicator revised Q3 growth down to 2.1%. In Europe, there was disappointment regarding US tariffs, as OPEC+ is expected to make production adjustments. Oil prices dropped by more than $2.00 to $67.25.
Data from August 1st highlights a significant economic slowdown that derivative traders need to respond to. The unexpectedly low addition of 73,000 jobs, combined with a large downward revision of 258,000 for May and June, indicates that the labor market is weaker than previously thought. Traders should prepare for continued economic weakness in the upcoming weeks.
This situation of weak economic data, new trade tariffs, and geopolitical tensions from nuclear submarine positioning suggests higher market volatility. The sharp decline in the stock market supports this view, and traders should anticipate the CBOE Volatility Index (VIX) to stay above recent averages of 15-18. Buying protection through put options on stock indices could be a wise strategy.
Interest Rate Expectations
The bond market reacted swiftly, with the two-year yield dropping over 23 basis points, marking one of the largest one-day movements we’ve seen in 2025. This signals strong expectations that the Federal Reserve will need to cut rates in September and potentially again by year-end. We recommend going long on interest rate futures to bet on further falling yields.
For equity traders, the NASDAQ’s 2.24% decline shows the risks facing growth-oriented sectors. This concern is further supported by the ISM Manufacturing Index’s drop to 48.0, a level that historically signals potential economic downturns and recessions. We suggest looking to short stock index futures or purchase bearish option spreads.
The U.S. dollar’s significant drop, especially over a 2% fall against the Japanese Yen, stems from decreasing expectations for US interest rates. The Swiss Franc and Yen are reaffirming their roles as safe-haven currencies amid global uncertainty. We believe that shorting the dollar against these currencies is a viable strategy.
In the energy sector, the potential for an OPEC+ production increase clashes with growing evidence of slowing US demand. Oil prices have decreased to around $67 a barrel as a result. Given the weak economic data, we see more downside risk for crude oil, making short positions in WTI futures appealing.
Create your live VT Markets account and start trading now.
ProPetro Holding Corp. announced a second-quarter 2025 adjusted loss of 7 cents per share. This was worse than the expected profit of 3 cents, mainly due to weak pricing and reduced activity. Last year’s loss was 3 cents.
Revenues reached $326.2 million, just below the $327 million forecast. The decrease stemmed from lower service revenues in the Cementing segment, down 3% to $32.4 million. This contributed to an overall 8.6% drop from last year’s $357 million.
Adjusted EBITDA fell to $49.6 million, a 31.8% decline from $72.7 million in the previous quarter and also below expectations. ProPetro signed a 10-year deal to provide 80 megawatts of PROPWR service, with over half of its hydraulic horsepower tied to long-term contracts.
Since starting a $200 million share repurchase program, ProPetro has bought back 13 million shares. This program has been extended until December 2026, but no shares were repurchased this quarter.
The Pressure Pumping segment accounted for all total revenues, even though service revenues dropped 8.6% to $326.2 million. Total costs and expenses reached $329.3 million, a 7.9% decrease from the previous year but higher than the anticipated $322.2 million.
As of June 30, 2025, ProPetro had $74.8 million in cash and $45 million in borrowings. Capital spending was $73 million, with $37 million already paid. Some spending on PROPWR equipment was financed with a partner.
The company generated $54 million in net cash from operations and plans capital expenditures of $270 million to $310 million for 2025. With recent tariff-related oil price drops, ProPetro expects to operate 10 to 11 hydraulic fracturing fleets in the third quarter.
Valero Energy, Halliburton, and Equinor also reported quarterly results, showing mixed performances. Valero exceeded expectations with earnings of $2.28 per share, Halliburton met expectations, and Equinor fell short. Other companies in the sector also had varied results.
With the earnings miss and lowered outlook, we predict a bearish trend for ProPetro in the upcoming weeks. The company’s forecast to operate fewer hydraulic fracturing fleets hints at lower expected revenue. We should consider preparing for a potential drop in the stock price, possibly through put options for September or October 2025.
This downturn is occurring in a tough market. Recent data shows WTI crude prices have decreased from over $85 in May to around $72 in late July 2025, mainly due to new trade tariff announcements raising concerns about an economic slowdown. Looking back at the 2018-2019 period, we saw similar trade disputes causing considerable volatility and downward pressure on oil prices, which may offer insight into current trends.
Industry statistics support this decline, showing that the U.S. frac spread count has dropped by 5% in the past month. The most significant reductions are in the Permian Basin, where ProPetro operates heavily. This indicates that service providers will likely face weak pricing power through the third quarter.
With the stock’s implied volatility expected to rise following this news, buying puts outright might be costly. A more thoughtful strategy would be to implement bear put spreads, which can reduce entry costs while still allowing for profit from a downward or sideways movement. This method helps manage the impact of high volatility premiums.
Even with the short-term concerns, we must recognize the company’s long-term contracts and the new PROPWR agreement. These factors provide revenue stability and could hint at a recovery in 2026. For traders willing to take on risk, the drop in price might be a chance to buy long-dated call options, like those expiring in January 2026, as a bet on future improvement.
We’ll keep a close eye on ProPetro’s cash flow and capital spending. While generating $54 million from operations is encouraging, the planned capital expenditures are substantial. A lengthy period of low activity could pressure their balance sheet, making cash and debt levels essential metrics to watch in the next earnings report.
The ISM Manufacturing PMI dropped to 48.0 in July, down from June’s 49.0. This signals a slowdown in the US manufacturing sector and is below the expected 49.5.
The Employment Index fell to 43.5 from 45.0, highlighting challenges in hiring within the sector. The Prices Paid Index decreased to 64.8 from 69.7, while the New Orders Index had a slight increase to 47.1 from 46.4.
As a result, the US Dollar is under pressure, trading at around 98.80. This shift comes amid new data releases and speculation about a potential interest rate cut by the Federal Reserve in September.
Gross Domestic Product (GDP) measures how the economy grows over time and affects currency values. A rising GDP usually strengthens the national currency and can lead to higher interest rates. However, this may lower gold prices by raising opportunity costs.
This information is for your reference only and should be verified before making any investment decisions. All investments pose risks, including the possibility of loss.
The US manufacturing sector faced challenges in July 2025, indicating a slowdown. The ISM PMI of 48.0 shows contraction and missed analysts’ expectations. This suggests the economic weakness seen in the second quarter may continue into the third.
The Employment Index’s drop to 43.5 raises concerns for the job market. Recent government data revealed that Non-Farm Payrolls for July added only 155,000 jobs, which is below the anticipated 185,000. A cooling labor market could affect consumer spending in the coming months.
This trend of weaker data provides the Federal Reserve with more reasons to consider decreasing interest rates. Market expectations now reflect over a 70% chance of a rate cut during the September 2025 meeting. The drop in the Prices Paid Index to 64.8 suggests that inflationary pressures could be easing.
For derivative traders, this reinforces a bearish outlook on the US Dollar. The Dollar Index has revisited recent lows around 98.80, with further declines likely if rate cut expectations strengthen. We might consider buying put options on US Dollar ETFs to prepare for a possible downturn in August and September.
A weaker dollar and lower interest rates generally favor gold. Historically, when the Fed eases, as seen in 2019, gold tends to perform well because the opportunity cost of holding it decreases. Therefore, buying call options on gold ETFs may be a smart move to protect against dollar weakness.
The outlook for the broader stock market is uncertain, creating opportunities for volatility trades. While weak economic data could hurt corporate profits, hopes for a Fed rate cut provide some support. This tug-of-war could result in sharp market shifts, making long straddles or strangles on an index like the S&P 500 an appealing strategy amid this uncertainty.
The major US stock indices ended the week with losses. The NASDAQ and Russell indices each dropped more than 2%. Several key factors contributed to this decline: the start of new tariffs on August 1, disappointing jobs data from revisions, the positioning of US nuclear submarines amidst geopolitical tensions, and the firing of the BLS chief over allegations of data manipulation.
Here are the specific declines:
– The Dow industrial average fell by 542.40 points, or 1.23%, to 43,588.58.
– The S&P index dropped 101.38 points, or 1.60%, to 6,238.01.
– The NASDAQ index decreased by 472.32 points, or 2.24%, ending at 20,650.13.
– The Russell 2000 fell 44.86 points, or 2.03%, to 2,166.78.
For the week, the Dow dropped 2.92%, the S&P fell by 2.36%, and the NASDAQ decreased by 2.17%.
Companies That Performed Well
Despite the overall market decline, some companies managed to do well. Corning saw a 12.10% rise after posting strong earnings, and Meta and Microsoft gained by 5.21% and 2.05%, respectively. Next week, earnings reports are due from several major companies, including Berkshire Hathaway, Pfizer, and Disney, which could affect market trends.
Given the new tariffs and the weak jobs report, now may be a good time to think about protective puts on key indices like the SPX and QQQ for the coming weeks. The August jobs report showed a net loss of 50,000 jobs after revisions, a stark contrast to an expected gain of 180,000. This marks the first negative print since 2023 and could signal further market declines as recession fears grow.
Increased geopolitical tensions, particularly concerning the movement of nuclear submarines, are adding to market worries. The VIX, a gauge of market fear, surged over 25% this week to close above 22, a level we haven’t seen consistently since early 2024 during regional banking stress. Traders might consider VIX call options or volatility-linked ETFs to protect against or profit from potential future market turbulence.
Opportunities In The Defense Sector
This environment is creating opportunities in the defense sector. Companies like Northrop Grumman are already performing well. The iShares U.S. Aerospace & Defense ETF (ITA) has outperformed the S&P 500 by over 8% year-to-date in 2025, and ongoing global tensions could boost that trend. Using call options in this sector might provide upside exposure even if the broader market declines.
Despite the sell-off, certain areas like AI and semiconductors are showing impressive strength, with companies like Meta and Super Micro continuing to rise due to robust earnings. This divergence indicates that selling cash-secured puts on reliable tech firms could be a smart strategy, allowing traders to earn premiums during times of elevated fear while potentially acquiring strong assets at lowered prices if the market dips further.
With major companies such as Disney, Eli Lilly, and AMD set to report earnings next week, implied volatility is sharply increasing. For instance, implied volatility for Disney’s options suggests a potential price swing of 8% after its announcement, which is significantly higher than its quarterly average. This makes options strategies like straddles or strangles appealing for traders who anticipate significant price movement, even if they aren’t sure about the direction.
Create your live VT Markets account and start trading now.
Cryptocurrencies, especially Bitcoin, have changed how people invest and are now being included in retirement plans. The idea of adding digital currencies to an Individual Retirement Account (IRA) in the USA raises interesting questions. IRAs are designed to help people save for retirement with tax advantages. They come in different types, like Traditional and Roth IRAs, which usually hold traditional assets such as stocks and bonds. However, the popularity of cryptocurrencies has sparked interest in incorporating them into these accounts.
Since 2014, the IRS has treated cryptocurrencies as taxable “property,” like stocks or real estate. This classification has made it possible to create self-directed Crypto IRAs, allowing people to hold and trade cryptocurrencies. Services from platforms like BitcoinIRA, iTrustCapital, and Fidelity Digital Assets offer these types of IRAs. They provide both Traditional and Roth Crypto IRAs, following IRS rules about contribution limits and penalties for early withdrawals.
Including cryptocurrencies in retirement accounts can offer growth potential, tax benefits, and diversification. Although often volatile, Bitcoin has historically done better than traditional investments over long periods. Tax benefits arise within IRAs, where capital gains are either delayed or exempt. Additionally, cryptocurrencies tend to have a low correlation with traditional markets, enhancing diversification.
However, the volatility of cryptocurrencies carries risks. Bitcoin has experienced sharp drops, which can endanger retirement plans that rely too heavily on it. Crypto IRAs may be more expensive than Traditional IRAs, due to various fees. The evolving legal status of cryptocurrencies also adds uncertainty. Experts recommend that cryptocurrencies should only make up a small part of a retirement portfolio, especially for younger investors who have long-term aspirations.
More and more people are looking at including Bitcoin in their retirement accounts because of its tax advantages and potential for growth. While appealing, cryptocurrencies come with speculative risks. A balanced strategy within a diversified portfolio, aligned with investment timelines, is wise. Even with the allure of Crypto IRAs, traditional systems, like Social Security, still serve as the backbone of American retirement saving.
The growing trend of including Bitcoin in retirement accounts indicates steady demand that can help stabilize prices. A report from Morningstar in July 2025 noted that crypto investments in self-directed IRAs increased by 15% in the second quarter of 2025. This steady buying pressure offers a good environment for traders with a cautiously optimistic outlook.
This solid demand also contributes to ongoing volatility, which brings clear opportunities for trading. The T3i BitVol Index, which measures the 30-day expected volatility of Bitcoin, was around 65% in late July 2025, higher than the lows seen in late 2024. Such conditions make strategies like selling cash-secured puts or setting up volatility-harvesting positions attractive in the upcoming weeks.
Despite this potential, caution is essential due to the unpredictable legal situation. We are witnessing renewed discussions in Washington about possible SEC guidelines for digital asset custodians within retirement accounts. This uncertainty suggests that keeping some long-dated options as a safeguard against sudden regulatory changes could be wise.
Reflecting on the steep declines of 2022, we recognize that overexposure remains a serious risk even in a climate of positive long-term trends. Therefore, we believe that using defined-risk strategies, like credit and debit spreads, will be crucial in the upcoming weeks. These strategies will allow us to benefit from price changes while carefully managing our maximum potential loss.
The ISM Manufacturing Prices Paid index in the United States was 64.8 for July, which is lower than the expected 70. This number indicates changes in manufacturing prices and factors affecting pricing in the industry.
In the currency markets, EUR/USD has risen above 1.1550 due to weaker US employment and manufacturing data. At the same time, GBP/USD has regained strength, trading above 1.3250, also influenced by the same reports that hinted at a weaker dollar.
Gold Reaches New Highs
Gold hit a weekly high of about $3,350, benefiting from falling US Treasury bond yields. This movement reflects changing expectations about the Federal Reserve’s future rate decisions, prompted by disappointing job numbers.
In the cryptocurrency space, Bitcoin and other coins are facing difficulties after a strong July. Bitcoin dropped below $115,000 as traders looked for support levels amid rising market liquidations and price changes.
With recent signs of a slowing US economy, we think the outlook for many assets has shifted. The ISM data showed a decline in prices paid by manufacturers to 64.8, combined with weaker employment numbers, implying that the Federal Reserve’s recent rate hikes are starting to have an impact. We may need to prepare for a period of ongoing US dollar weakness.
For currency markets, we expect further growth in EUR/USD and GBP/USD. Traders might consider buying call options on the Euro, aiming for a move towards 1.1700 in the upcoming weeks. Historically, the dollar’s rapid decline in late 2023 illustrates how quickly market sentiment can change once there’s a belief that the Fed has stopped hiking rates.
Bullish Outlook For Gold
The outlook for gold is very positive. It has broken through key resistance to reach $3,350, primarily driven by declining Treasury yields. We anticipate this trend will continue. We should look to add to long gold futures positions, as markets are beginning to price in a good chance of a rate cut before the end of 2025.
In contrast, the cryptocurrency market now needs a more cautious approach. Bitcoin’s inability to maintain $115,000 indicates significant profit-taking after the July rally, which was mainly fueled by speculation regarding new institutional products. The high liquidation volume, over $400 million in just 48 hours, suggests we should wait for a solid support base to form before starting new long trades.
Create your live VT Markets account and start trading now.
In July, the University of Michigan reported that one-year consumer inflation expectations in the U.S. climbed to 4.5%, up from 4.4%. This indicates how consumers feel about inflation over the next year.
The EUR/USD currency pair saw a boost, trading above 1.1550, following weak U.S. employment data and the ISM Manufacturing PMI. Likewise, GBP/USD turned positive, rising above 1.3250 after disappointing Nonfarm Payrolls and Manufacturing data in the U.S.
Gold prices have reached new weekly highs around $3,350, supported by falling U.S. Treasury bond yields. This change reflects adjustments in what the market expects from the Federal Reserve’s interest rate policies.
In the cryptocurrency market, Bitcoin declined to below $115,000 after a bullish trend in July. It may find support at $112,000 amid rising liquidations, highlighting ongoing volatility.
The eurozone economy has shown resilience this summer, bolstered by a U.S.-EU agreement and spending plans in Germany. However, there’s still a possibility of a final interest rate cut from the European Central Bank as wage indicators weaken.
With rising consumer inflation expectations in July 2025 and weak data on employment and manufacturing, we see a clear trend. The Federal Reserve may have less ability to raise interest rates aggressively. The latest Consumer Price Index (CPI) report for July confirmed this, showing core inflation at 3.1%, below the 3.3% forecast, indicating the Fed’s earlier tightening measures are taking effect.
This situation is unfavorable for the U.S. dollar, as we’ve noticed in the rallies of EUR/USD and GBP/USD. We believe the dollar’s weakness has room to grow in the coming weeks. Therefore, we are considering buying call options on EUR/USD with strike prices above 1.1600 to capture potential gains while managing risk.
However, the eurozone’s strength could be limited by its central bank. ECB President Lagarde mentioned on July 28, 2025, that the “disinflationary process is ongoing,” which keeps a potential rate cut in play for autumn. This difference in policies leads us to be optimistic about the euro against the dollar while being cautious about a substantial rally, prompting us to hedge our positions.
The drop in U.S. Treasury yields has made gold appealing, driving it towards $3,350. This situation resembles the 2020 environment when falling real yields pushed gold to record highs. We should consider long positions in gold futures or options on gold-related ETFs to take advantage of this upward momentum.
In the crypto market, Bitcoin’s drop below $115,000 after a strong July indicates that leverage is being cleansed. Data from Glassnode on July 30, 2025, revealed a rise in open interest for Bitcoin put options with strike prices near $110,000, as traders prepare for more volatility. We should explore using option straddles, which profit from significant price movements in either direction, to navigate this uncertainty.
Economic Indicators for July.
Insights 
VT 
