In July, the US nonfarm payrolls were at 73,000, falling short of the expected 110,000. This weaker performance affected the US Dollar and revealed broader economic challenges. The EUR/USD exchange rate rose above 1.1550 because of the disappointing US job and ISM Manufacturing PMI data. Meanwhile, GBP/USD went up above 1.3250 after six days of declines, boosted by the same weak economic news. Gold prices hit new weekly highs around $3,350, thanks to declining US Treasury bond yields. This shift led to a reevaluation of the Federal Reserve’s interest rate plans following the poor job report. In the cryptocurrency market, Bitcoin dropped below $115,000 due to a surge in liquidations. This decline occurred in a weak August trend after a strong July that saw Bitcoin and some altcoins reach record highs. The euro area’s economy showed unexpected resilience over the summer, driven by EU-US agreements and a rise in German spending. However, there are risks, including a possible rate cut later this year or in early 2026, particularly with weaker wage indicators. Forex trading carries high risks due to leverage that can lead to substantial losses. It’s essential to consider your investment goals carefully and seek professional advice when needed. Following the weak July jobs report, we expect the US Dollar to show continued weakness in the coming weeks. The Federal Reserve’s future actions are now less certain, and market predictions reflect this change. Odds for a September rate hike have dropped from over 60% last week to below 35%, according to CME FedWatch data. This makes bullish positions on the Euro and British Pound appealing against the Dollar. We should think about buying call options on the EUR/USD and GBP/USD to take advantage of potential gains while managing risk. The Eurozone’s strong economic performance, highlighted by German factory orders exceeding expectations, supports this outlook. Falling US Treasury yields are strongly benefiting gold, pushing prices to new highs. We believe this trend will continue as long as doubts about the Fed’s next moves persist. Investing in gold futures or call options seems wise, especially as the VIX volatility index has risen to 17, its highest level in two months. A similar scenario occurred in the summer of 2021 when a significant nonfarm payroll miss caused a market reassessment of the Fed’s tapering schedule. That situation led to weeks of dollar weakness and a rally in precious metals. History suggests that we may see a similar trend this August. For cryptocurrencies, Bitcoin’s drop below $115,000 indicates a typical “risk-off” movement after a strong July. The surge in liquidations over $400 million in leveraged long positions shows that market fear is returning. We expect further declines or consolidation, making put options a practical strategy for hedging. With the unexpected strength in the euro area, we can also explore relative value trades. While a long EUR/USD position looks favorable, the risk of a European rate cut later this year still exists. Traders might consider using long-dated options to hedge against any sudden dovish moves from the European Central Bank.

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US stock indices are dropping after a disappointing jobs report, concerns about tariffs, weak Amazon earnings, and worries about inflation and recession. All major indices fell more than 1%, with the NASDAQ sliding by 1.5%. The Dow industrial average fell by 574 points to 43,550, a decrease of 1.31%. The S&P index dropped by 85.97 points (1.36%), now at 625,322. The NASDAQ index decreased by 365 points (1.76%) to 20,755. The Russell 2000 fell by 41 points (1.86%), now at 2,170.55.

Yields Falling

Yields are declining, with the chance of a rate cut in September rising from 45% to 75% after the report. The 2-year yield is at 3.745%, down 20.6 basis points, while the 5-year yield is at 3.805%, down 15.4 basis points. Both the 10-year and 30-year yields also fell. In the commodities market, crude oil is priced at $68.98, down $0.28. Gold rose by 1.6% to $3,342. Bitcoin dropped by $320 to $115,408, while copper increased by 1.62% to $4.42. Amazon stocks fell by 6.27%, Meta by 2.22%, and Tesla by 5.21%, while Apple saw a small gain. Today’s market turmoil signals a need to strengthen our defenses against further stock market drops. The steep decline in stocks, especially in tech sectors sensitive to the economy, is a response to the weak jobs report, which showed only 50,000 jobs were added, far below the 180,000 expected. It may be wise to purchase put options on the NASDAQ 100 through the QQQ ETF, as high-growth companies like Nvidia and Tesla are underperforming. The bond market indicates a Federal Reserve rate cut is likely, with yields falling sharply. This signifies a search for safety and suggests that fears of a recession are now overshadowing earlier concerns about inflation. Traders might consider going long on U.S. Treasury futures or buying call options on bond ETFs like TLT to benefit from lowering rates.

Volatility Returns

Volatility is making a comeback, and we should treat it as a distinct asset class in the upcoming weeks. The CBOE Volatility Index (VIX) has surged more than 30% to above 25, a level we haven’t seen since the banking issues in spring 2024. Buying call options on the VIX or betting on big price changes in volatile stocks like Amazon could yield profits. In commodities, gold’s rise to over $3,300 an ounce marks a traditional move away from risk and the U.S. dollar. This trend may persist as long as the market anticipates rate cuts from the Fed, reminding us of late 2023. We can ride this wave by acquiring call options on gold miners or the GLD ETF. The significant 21% drop in copper yesterday— the largest single-day fall since the 2008 financial crisis— is a crucial economic alert. Although it’s rebounding today, the volatility highlights uncertainty regarding global industrial demand. We should remain cautious and limit aggressive bullish positions on industrial commodities until we gain more clarity about the economy. Be vigilant about the divide in technology stocks, where giants like Apple can rise while semiconductor and e-commerce companies struggle. This indicates a flight to quality within the sector, as investors seek safety in companies with solid finances and strong pricing power. We could capitalize on this divergence by setting up pairs trades, like going long on Apple options while buying puts on the semiconductor ETF (SMH). Create your live VT Markets account and start trading now.

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The White House announced that Switzerland has chosen not to lower trade barriers with the United States. This decision puts a stop to any efforts for a more balanced trade relationship between the two countries. Switzerland’s position could affect future trade talks with the U.S., which prioritizes fair agreements where both sides benefit.

Current Trade Policies and Relations

The current trade policies are putting strain on U.S.-Switzerland relations. The U.S. remains committed to seeking fair terms to improve trading conditions. The failure of trade negotiations could put pressure on the Swiss Franc. We can expect the U.S. government to consider retaliatory actions that may weaken the CHF against the dollar. In 2024, over 16% of Switzerland’s total exports went to the U.S., posing a significant economic risk. Investors might want to consider short positions on the Swiss Market Index (SMI) using futures or buying put options. Companies like Novartis and Roche, which reported that more than a third of their revenue comes from the U.S. market, may be particularly affected. Their stocks are good candidates for bearish options strategies in the coming weeks. Market anxiety is likely to rise, creating chances for volatility. The Swiss Volatility Index (VSMI), which had been stable near its 12-month low of 13, has already risen to 17 following this news. Buying calls on the VSMI or similar volatility products could yield profits during this uncertain time.

Prolonged Trade Disputes and Market Instability

This situation is reminiscent of the long U.S.-China trade battles in the late 2010s. In hindsight from 2025, we can see how those early tariff announcements led to months of market volatility. We should prepare for a similar period of instability ahead, rather than thinking this is just a one-day event. For currency traders, this is a good time to explore FX options. The USD/CHF exchange rate, which has been stable around 0.9100 for the last three months, is likely to rise. Buying USD call options against the CHF is a low-risk strategy to take advantage of the anticipated movement toward the 0.9400-0.9500 range, which we last saw in early 2024. Create your live VT Markets account and start trading now.

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Hammack from the Federal Reserve showed disappointment with the recent jobs report but still believes the labor market is healthy. He expects the job market might weaken as we move toward the end of the year. Hammack pointed out that inflation concerns are currently more pressing for the Fed than employment issues. The rising costs are making it tough for businesses, and they may have to raise prices since they can no longer absorb those costs.

Current Monetary Policy

He mentioned that the current monetary policy is somewhat restrictive because the economy is close to its long-term neutral rate. Still, the Fed is open to new information that could influence future policies. Before the Fed’s next meeting, Hammack will review another jobs report and two more inflation reports. He finds this time challenging for setting monetary policy, demonstrating strong respect for Fed Chair Powell and emphasizing the importance of upcoming data. Meanwhile, the NASDAQ index dropped by 288 points, indicating market worries. Businesses are facing a lot of uncertainty in this economy. The jobs report for July 2025 was disappointing, with only 165,000 new jobs created, while forecasts were around 200,000. However, wage growth was unexpectedly strong at 0.5% for the month, keeping inflation concerns at the forefront. This conflicting data caused the NASDAQ to fall over 1.5% today as the market reacted.

Inflation Concerns

The Federal Reserve is more focused on the ongoing inflation pressure than on a slight softening in the job market. Rising prices are seen as the more pressing economic threat right now. This suggests the Fed will continue its hawkish approach, prioritizing inflation control over fears of an economic slowdown. The main concern is that businesses facing high uncertainty can’t absorb rising costs and will need to pass them on to consumers. Early signs of this appeared in the June 2025 Consumer Price Index (CPI) report, which exceeded expectations. This trend may push inflation higher as we head into the end of the year. For derivative traders, this situation suggests increased market volatility in the coming weeks. With the Fed stating it is highly focused on data, the two upcoming inflation reports and the next jobs report could significantly impact the market. Strategies that benefit from price swings, like buying VIX calls or creating straddles on major indexes, should be considered. Given the emphasis on persistent inflation, it appears that interest rates will stay high longer than many anticipated. This scenario mirrors the market conditions of 2023, when high rates limited growth potential and affected technology stock valuations. Thus, puts on rate-sensitive sectors or unprofitable tech stock baskets may provide valuable protection. The policy is described as “a little restrictive,” indicating the Fed feels it needs to take further action if inflation doesn’t start to ease. As we approach the September meeting, the data will guide decisions. All attention is on upcoming releases to determine if the job market further declines or if inflation rises again. Create your live VT Markets account and start trading now.

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Swiss President Keller expressed disappointment after the US announced a 39% tariff on Swiss imports. This new tariff is higher than what was previously agreed upon and will impact key Swiss industries, especially machinery and watches, while pharmaceuticals remain unaffected. Switzerland is in touch with the US to find a solution. The country has no industrial tariffs and has already promised to invest in the US, making further concessions difficult.

Currency Fluctuations

The tariff news comes at a time when the USDCHF currency pair is fluctuating, impacted by a weaker-than-expected US jobs report. Earlier, the pair peaked at 0.81732 but then dropped below the 100-hour moving average of 0.80856 after the job data was released. A swing area between 0.8054 and 0.80628 is now in focus, with the 200-hour moving average at 0.80159. There’s a conflict between short-term trends and a significant new economic story. The poor US jobs report is currently weakening the US dollar, but the surprising 39% tariff on Swiss goods poses a serious challenge for the Swiss economy. This underlying weakness of the Swiss franc is likely to have a bigger impact than the temporary dip of the dollar in the medium term. The effect of these tariffs on specific Swiss industries will be significant and should not be overlooked. Reviewing trade data from 2024, the US was the largest market for Swiss watches, with exports exceeding CHF 3.6 billion. A 39% tariff would make much of this trade unprofitable, directly affecting the Swiss economy.

Swiss National Bank Actions

The Swiss National Bank (SNB) is known for taking action against economic threats that could strengthen the franc. A past example is when it unpegged the franc from the euro in 2015. The market should expect that the SNB will aim to weaken the franc in response to the recent tariff news. For derivative traders, this situation suggests buying call options on USDCHF in the coming weeks. This strategy allows traders to profit from an expected increase in the currency pair due to a weaker franc, while also limiting potential losses if the US dollar remains weak longer than anticipated. The recent dip below the 100-hour moving average offers a better entry point for these trades. Key technical levels to watch include the swing area between 0.8054 and 0.8062, as well as the 200-hour moving average at 0.80159. Signs of price stabilization at these support levels would be seen as a strong signal to initiate long-position derivative trades. The tariff news should provide support for the pair, making a significant drop below these levels unlikely. This mix of news is likely to increase implied volatility in the USDCHF pair. The unexpected tariff adds uncertainty, making options more expensive but also indicating a higher chance of sharp price movements. Traders should consider this increased volatility in their strategies for the coming weeks. Create your live VT Markets account and start trading now.

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The US dollar dropped sharply after disappointing job data led to lower yields. Revisions to last month’s numbers caught the market off guard, influencing currency changes. For the EURUSD, the 100-day moving average offered support in response to the US job report. Buyers pushed the pair up from around 1.1400 to a high of 1.1558, with the 100-hour moving average acting as a support level. However, the 1.1558 level struggled to break above the 38.2% retracement, which is needed for more upward movement.

USDJPY Resistance Levels

The USDJPY fell below the 200-day moving average at 149.51 and the 50% midpoint of the 2025 range at 149.375, creating significant resistance. Prices dropped to a swing area around 148.56 and 148.73. A break below this area will draw attention to the 100-bar moving average on the 4-hour chart at 147.95. The USDCHF also tumbled after the weak job report, falling below the 100-hour moving average at 0.80856. Prices dipped towards the 50% midpoint at 0.81732 before bouncing back. The pair approached a swing area between 0.8054 and 0.80628, with the 200-hour moving average at 0.80159. Given the significant decline in the US dollar, we should prepare for ongoing weakness in the coming weeks. The jobs report for August 1st showed only 95,000 new jobs—well below the 180,000 expected—and the downward revisions suggest the Federal Reserve may need to cut rates sooner than expected. The market is now pricing in a higher chance of a rate cut before the end of 2025, a notable change from just weeks ago.

Forex Strategy Recommendations

For EURUSD, the strong support at the 100-day moving average near 1.1400 is a bullish sign. We should consider buying call options with strike prices above 1.1560, expecting a breakout soon. This is backed by recent Eurozone PMI data, which has shown surprising strength compared to the US, indicating a policy difference that benefits the Euro. The break below the 200-day moving average in USDJPY is significant, transforming former support at 149.51 into new resistance. This signals a good opportunity to buy put options, as the path forward seems lower. This aligns with the Bank of Japan’s increasingly hawkish stance seen in July, contrasting with the dovish outlook for the Fed. For USDCHF, the failure to hold above the 0.8173 level, followed by the drop below the 100-hour moving average, indicates strong selling pressure. We should consider shorting USDCHF futures or buying puts, using any rebound toward the 0.8085 level as a chance to sell. Our next key target is the support around the 200-hour moving average near 0.8016. Create your live VT Markets account and start trading now.

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The US jobs report for July 2025 revealed an increase in non-farm payrolls by 73,000. This figure is much lower than the expected 110,000. Notable adjustments were made to the previous month’s data, which was revised from 147,000 down to just 14,000. The total monthly payroll revision was a decrease of 258,000. Private payrolls rose by 83,000, despite an estimate of 100,000, and the previous figure was adjusted to 3,000. Manufacturing payrolls fell by 11,000, compared to an estimated drop of 3,000, while last month’s numbers were revised down to -15,000. Government payrolls also declined by 10,000 after an earlier revision from 73,000 up to 11,000. The unemployment rate remained at 4.2%. Average earnings saw a 0.3% increase from the previous month and a 3.9% increase year-on-year, meeting expectations. The average workweek was 34.3 hours, slightly above what was estimated. The labour force participation rate stood at 62.2%, while underemployment rose to 7.9% from 7.7%. In reaction to the report, US stocks, including the S&P and Nasdaq, fell, along with yields and the USD. The S&P dropped by 53 points, and the Nasdaq fell by 243 points. The probability of a rate cut in September and December is now 75% and 72%, respectively, as a result of the weaker data.

Impact Of Job Report Revisions

Today’s jobs report is significant, not just for the headline number. The drastic reduction of last month’s data from 147,000 to only 14,000 jobs is the key takeaway. This change reveals a much bleaker view of the economy than we had just a day ago. Since Fed Chair Powell indicated he needed two months of data before the September meeting, this report provides that insight in one fell swoop. Given the last inflation report, which showed CPI cooling to 2.8%, the Fed clearly has a reason to act. The market is responding, now pricing in a 75% chance of a rate cut at the September 17 meeting. The 2-year Treasury yield has plummeted over 16 basis points to 3.788%. This signals a shift towards trades that benefit from lower interest rates. Consider taking long positions in interest rate futures or buying call options on Treasury bond ETFs in the coming weeks.

Reaction Of Stocks And The US Dollar

The stock market’s recent drop indicates fears of a potential recession, which this data supports. We anticipate increased volatility as the Fed’s September decision approaches, with the VIX surging over 30% today to trade above 19. Buying puts on indices like the S&P 500 or Nasdaq 100 could serve as a useful hedge against further economic concerns. A weaker US dollar is likely, as lower interest rates diminish its attractiveness to foreign investors. This trend is expected to continue as the market strengthens its bets on a Fed rate cut. Shorting the dollar against currencies like the euro or yen can be a direct strategy to capitalize on this. We’ve seen similar patterns before, especially leading up to 2008. Significant downward revisions of payroll numbers were early indicators of a weakened labor market. Today’s revisions should be viewed as a serious warning of a potential economic slowdown. The report highlights widespread weakness, with job losses in manufacturing and professional services. Aside from the strong healthcare sector, the private sector is struggling, which aligns with recent data showing retail sales declining for three consecutive months. This suggests that the US consumer, the backbone of the economy, is finally losing momentum. Create your live VT Markets account and start trading now.

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OPEC+ is likely to approve an increase in oil production during their meeting on Sunday. This increase might be around 548,000 barrels per day, or possibly less. The decision will influence global oil supply. However, the exact effect will depend on the final production increase agreed upon. OPEC+ actions are closely watched because they play a significant role in the oil market.

Expected Impact on Oil Prices

OPEC+ is set to boost oil production this Sunday, suggesting more supply will enter the market. Generally, when supply increases while demand remains steady, prices tend to fall. Therefore, we expect crude oil prices may drop, creating a bearish outlook in the short term. The market has been preparing for this, so a large price drop might already be reflected in current prices. This past week, West Texas Intermediate (WTI) crude fell below $75, indicating that traders were getting ready for the announcement. Thus, the actual decision on Sunday may not lead to a drastic price drop unless the increase surpasses the expected 548,000 barrels per day. Recent data supports this bearish trend. A report from the Energy Information Administration (EIA) released Wednesday showed an unexpected rise in U.S. crude inventories of over 2.1 million barrels, suggesting weaker demand. Additionally, manufacturing PMI data from China for July was disappointing, reflecting soft global demand.

Strategy Considerations

In this situation, buying put options seems like a straightforward strategy for the coming weeks. This lets us bet on falling prices while limiting our risk to the premium paid for the option. We are considering September puts with strike prices around $72 or $70, which would become profitable if oil prices continue to drop after the meeting. For those preferring a more cautious approach, we also recommend options that aim for smaller price drops. These trades can profit if oil prices fall slightly but offer protection against unexpected price spikes. Such strategies are lower risk, especially if OPEC+ announces a smaller hike or surprises the market. We’ve seen similar situations in the past, like in late 2023 when production cuts did not prevent prices from falling due to persistent global demand concerns. The market can quickly shift focus from supply decisions to actual consumption realities. The key will be to watch for the production numbers announced on Sunday and how they stack up against market expectations. Create your live VT Markets account and start trading now.

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USTR Greer said they will finish paperwork on several deals in the next few weeks or months. Current tariff levels depend on trade deficits with the United States.

Challenges With Switzerland

Greer mentioned that working with Switzerland is complicated. The upcoming paperwork suggests we should watch for important announcements soon. This uncertainty indicates that major stock indices might experience more volatility. During the 2018-2019 trade disputes, similar announcements led to sudden, unpredictable market changes, which benefited long volatility strategies. We now understand that tariff levels relate to trade deficits. Recent data from July 2025 shows that the U.S. trade deficit with the Eurozone grew by 4% compared to last year, making European exporters a likely target. Traders might want to consider bearish positions on European industrial stocks or buy puts on the Euro Stoxx 50 index. The mention of the “challenging situation” with Switzerland brings attention to the Swiss Franc and the Swiss Market Index (SMI). While the U.S. typically enjoys a trade surplus with Switzerland—over $22 billion in 2024—the concerns likely involve non-tariff issues like currency value or financial services. Since June 2025, the Swiss Franc has strengthened against the dollar by 2.5%, suggesting there could be efforts to weaken it.

Focus On Targeted Volatility

Our strategy in the coming weeks should focus on targeted volatility. This involves using options to protect against or bet on policy announcements that affect specific regions. For example, combining a long volatility position on the S&P 500 with a targeted short on the Swiss Franc could capture the effects of broad uncertainty and a specific diplomatic issue. Create your live VT Markets account and start trading now.

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The USD is seeing mixed activity as the US trading session starts. The US jobs report, released at 8:30 AM ET, is expected to show an increase of 110,000 non-farm jobs, with unemployment projected at 4.2%. Last month, non-farm payrolls grew by 147,000, but nearly half of those jobs were in state and local government, which is unlikely to happen again. In July, private-sector payrolls added 104,000 jobs, while job cuts from Challenger reached 62,075, the second-highest for July. Initial jobless claims are averaging around 220,000 over the past four weeks.

Current Economic Projections

This month, projections indicate a decline of 3,000 jobs in the manufacturing sector and an expected rise in average earnings to 3.8% year-over-year. No estimates are available for the labor force participation rate or U6 underemployment, which were previously 62.3% and 7.7%. Fed Governors Bowman and Waller disagreed during the recent FOMC meeting for different reasons. Both highlighted potential risks to the labor market and inflation expectations, pushing for a rate cut to address these concerns. New tariffs begin today, based on trade relationships. The Dow, S&P, and NASDAQ indices are sharply down, affecting the overall market outlook. Yields in the US debt market have risen, resulting in a steeper yield curve. The upcoming US jobs report is causing significant uncertainty, especially with low estimates at 110,000. Last month’s numbers were misleading due to government hiring, which is not expected to repeat. A number below this weak estimate could raise fears of a severe economic slowdown.

Impact Of New Tariffs

This uncertainty is causing market volatility to surge, with the VIX index climbing above 25 for the first time since the banking issues in spring 2024. Traders may want to consider buying protection against possible declines in the equity market. Purchasing put options on the S&P 500 or Nasdaq 100 offers a direct way to hedge against the risks from new tariffs and a weak jobs report. The disagreement from Fed Governors Bowman and Waller, both in favor of a rate cut, suggests that the central bank may be falling behind. The market is reacting quickly, with Fed funds futures showing an over 80% likelihood of a 25 basis point cut at the September FOMC meeting. This makes trades betting on lower short-term rates, like call options on 2-year Treasury note futures, more attractive. At the same time, the bond market shows a different signal, as longer-term yields are rising. This suggests that the new tariffs, which take effect today, are raising long-term inflation fears even as the economy cools. A yield curve steepener trade, where you go long on short-term debt futures while shorting long-term debt futures, could take advantage of this widening gap. These tariffs on major trading partners like Canada and Switzerland are driving new economic concerns. The mix of slowing growth and rising costs draws parallels to the stagflation period of the late 1970s. This stands in stark contrast to the consistent job gains and stable inflation seen just two years ago in 2023. With inflation risks and geopolitical tensions in play, gold may serve as a crucial safe-haven asset. It typically performs well during times of stagflation and when central banks ease. Traders might consider buying call options on gold ETFs to tap into potential gains amid ongoing market uncertainty in the coming weeks. Create your live VT Markets account and start trading now.

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