The US Senate will vote on Monday to confirm Stephen Miran as a member of the Federal Reserve Board. Miran is nominated by President Trump to take over for Kugler, who has recently stepped down. Most expect Miran to be approved along party lines. If confirmed, he will attend the Federal Open Market Committee meeting on September 16-17. A rate cut of 25 basis points is expected at the meeting, regardless of whether Miran is there.

Senate Voting Activity

Monday’s Senate session will feature a lot of voting. Recently, Republicans used the “nuclear option” to change Senate rules, allowing for a quicker confirmation process for President Trump’s nominees in the executive branch. This new rule lets the Senate confirm multiple nominees at once instead of one by one. The change passed with a 53-45 vote, making the confirmation process more efficient. With Stephen Miran’s vote coming up Monday, the immediate market response is predicted to be minor. A 25 basis point rate cut at the FOMC meeting on September 16-17 is already priced in, with over a 90% likelihood shown by the CME FedWatch Tool. Traders are primarily focusing on the future guidance and the dot plot that will come with the announcement, rather than the rate cut itself.

Longer-Term Rate Path

The real interest now is in the long-term rate direction with Miran joining the board. His appointment is expected to bring a more dovish voice, raising the chances of further easing by year’s end. This is already evident in SOFR futures, with contracts for December 2025 now reflecting almost a 45% chance of another rate cut, up from just 30% last week. Changes in the Fed’s leadership can shift market trends, similar to the Powell pivot in late 2018, which led to a significant rally after a tightening period. Miran’s confirmation is viewed similarly, suggesting a more pro-growth approach from the Fed through 2026. Traders are looking at longer-dated options on equity indexes, preparing for a prolonged low-rate environment. As we approach next week’s meeting, implied volatility is increasing. The VIX has jumped from 16 to just over 19 in recent sessions, showing uncertainty about the Fed’s announcement. Traders are purchasing short-term straddles on the SPY, anticipating a strong market move in either direction once the Fed’s comments are released. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

The United States plans to introduce new measures during a meeting of the finance ministers from the Group of Seven (G7) economies on Friday. These measures aim to impose high tariffs on China and India for buying Russian oil. This initiative targets the energy transactions of China and India with Russia. It highlights the US’s goal of creating stricter economic consequences due to ongoing global tensions.

Objectives Of The Tariffs

The purpose of the tariffs is to deter China and India from buying as much Russian oil. This strategy is part of a larger approach to manage important economic and political issues related to global trade and energy reliance. Overall, this action is part of a coordinated effort to exert financial pressure. The G7 finance ministers will discuss how to assess and possibly implement these proposed tariffs. With the G7 meeting on Friday, we expect increased volatility in energy markets. The US proposal to target China and India for their Russian oil purchases raises considerable geopolitical risks. We’re monitoring Brent and WTI futures contracts closely for any major movements as the weekend approaches.

Market Reaction And Considerations

The immediate strategy is to prepare for sharp price fluctuations, not just a specific direction. With the VIX sitting near its yearly low of 14, options are relatively inexpensive. Buying call options on oil ETFs like USO or even on the VIX itself could be a smart way to profit from the uncertainty created by this G7 news. We also need to keep an eye on currency markets, particularly the Chinese yuan and the Indian rupee. Serious tariff discussions will likely weaken these currencies against the US dollar. We remember the significant market reactions during the trade disputes of 2018-2019, and we might see similar patterns emerging now. The stakes are high, as Russia now exports over 75% of its seaborne crude—about 3 million barrels per day—to China and India. This constant supply has been a key reason Brent crude prices have remained stable at around $85 per barrel over the past month. Any disruption to this trade could cause an immediate and significant supply shock. However, we must also consider the chance that the proposal might not receive full G7 support. We saw divisions during the 2023 energy crisis, as European nations are sensitive to anything that could provoke inflation again. If Friday’s statement ends up being weak, oil prices could drop sharply, impacting those who are heavily invested on the long side. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Rabobank sees some short-term issues for the Australian dollar (AUD) before it starts to rise again. They believe that in the next one to three months, extra support for the US dollar could push the AUD/USD exchange rate down to about 0.65. However, Rabobank’s prediction for this exchange rate over the next year is still 0.89.

RBA and Fed Policies

This analysis focuses on the monetary policies of the Reserve Bank of Australia (RBA) and the Federal Reserve (Fed). Even though the GDP performed well in the second quarter, Rabobank expects the RBA to cut interest rates by 25 basis points in meetings scheduled for November, February, and May. In contrast, the Fed is likely to reduce rates by a total of 125 basis points by the end of 2026. Market projections show only a 43 basis point cut from the RBA in the next six months, while the Fed is expected to have about 88 basis points of easing. Rabobank warns that if traders misunderstand the RBA’s potential cuts or the Fed’s risks, the US dollar could gain strength against the Australian dollar in the short term. In the upcoming weeks, the Australian dollar may face challenges before it strengthens again in the long term. There’s a good chance traders will start buying the US dollar, which could lower the AUD/USD pair from its current level near 0.68 to around 0.65. This could be a short-term opportunity for those looking to trade during this dip. The outlook hinges on central bank actions. We believe the RBA may need to cut interest rates more aggressively than the current market expectations, especially with the August 2025 inflation data showing a cooling trend. Although the RBA kept its cash rate at 4.35% in its recent meeting, we forecast cuts starting in November.

Market Discrepancies

At the same time, the market might be incorrectly assuming that the Fed will act quickly. While the August US jobs report was weaker, Fed officials insist they need more clear evidence before they change their restrictive policy. This difference between market assumptions and what the central banks are likely to do will likely strengthen the US dollar over the next one to three months. For derivative traders, this strategy means positioning for a lower AUD/USD exchange rate. They could buy put options on the Australian dollar or engage in short AUD/USD futures contracts. The goal is to profit from a decline towards the 0.65 target by the end of the year. This approach is intended for the short term, as we expect a strong rebound over the next year. A similar pattern occurred in 2022, where initial US dollar strength eventually gave way once the Fed’s policy direction became clearer. We continue to believe the Australian dollar will recover significantly, maintaining our 12-month target for the AUD/USD exchange rate at 0.89. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

The proposal might ease some pressures on businesses, but it could add more strain on banks. These banks are already dealing with rising loan losses, which could get worse with the introduction of short-term loans.

Market Volatility

This new plan to help local governments pay off debts is a significant event in the market, and we are starting to see increased volatility. The Hang Seng Tech Index volatility tracker has risen almost 12% in the last two trading days, showing uncertainty about how this new liquidity will impact the market. We should get ready for big price changes in Chinese-related assets by exploring options strategies that can profit from this volatility. The size of this lending indicates a huge amount of yuan entering the system, which might put pressure on the currency. We recall the market shock from the managed devaluation in 2015. Although this situation is different, it could still lead to a weaker yuan. The offshore yuan has already fallen to 7.42 against the dollar, its lowest in over a year. Therefore, we are considering call options on USD/CNH to protect ourselves against or benefit from further declines.

Policy Impact on Sectors

This policy clearly affects different sectors differently, making it a good opportunity for a pairs trade. Banks are now taking on risky, low-interest debt, while industrial and construction companies will finally receive payments, which might improve their performance after a reported 5% drop in industrial profits year-over-year in August. We see a chance to buy call options on ETFs focused on materials while also buying put options on a Chinese financial index. With businesses getting paid what they are owed, we can expect construction and property projects to resume. This will increase the demand for industrial commodities, as China’s consumption shapes global prices. Iron ore futures for delivery in three months have already risen 8% to $122 per tonne this week. We believe this rally has more room to grow, making call options on base metals increasingly appealing. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Stocks reached new record highs. The Dow rose by 1.36%, the S&P increased by 0.5%, and the NASDAQ went up by 0.72%. Among the S&P sectors, energy dipped slightly by 0.04%. In contrast, materials, healthcare, and consumer discretionary sectors saw the biggest gains, increasing by 2.14%, 1.73%, and 1.70%, respectively. Top performers included Paramount Skydance, which jumped after acquisition news. Synopsys also saw gains thanks to strong demand for AI-related software. Stellantis benefited from stabilizing demand for electric vehicles (EVs), and Alibaba’s stock rose due to positive feelings about China reopening. Lam Research and Micron gained from higher demand for DRAM, logic, and AI servers.

Speculative Stocks and Gains

Tesla’s stock increased amid product speculation, while ARK Genomic Revolution rose on optimism in biotech. Cadence Design gained from a surge in semiconductor software demand. Moderna and Biogen’s stocks climbed as expectations grew around vaccine and clinical news. Ford’s increase linked to enthusiasm for new EV models. EPS 5000 beat earnings expectations, posting $0.31 per share instead of the anticipated $5.18, with revenue of $5.99 billion exceeding expectations of $5.90 billion. Their outlook suggests Q4 EPS will be between $5.35 and $5.40, with revenues projected at $6.075 billion to $6.125 billion. Adobe shares gained after positive earnings results. With the market reaching new highs, it’s wise to explore strategies that take advantage of this upward trend. The CBOE Volatility Index (VIX) recently dropped to 13.5, close to its lowest since late 2024, making protective put options cheaper for hedging. Traders might consider buying call options on broad market ETFs like SPY to ride the trend while using some profits to buy puts as portfolio insurance. This optimistic sentiment is backed by a solid economic foundation. The August 2025 jobs report showed an addition of 195,000 jobs, and wage growth has moderated. This indicates a strong economy that isn’t overheating, supporting the “soft landing” narrative that has been building for months, giving investors confidence that corporate earnings can keep growing without the risk of major interest rate hikes.

Sector Leadership and Economic Confidence

The strength in Materials and Health Care sectors reflects widespread economic confidence beyond just technology. We might consider bullish call spreads on the Materials Select Sector SPDR Fund (XLB) since demand for industrial commodities typically increases during economic growth. The semiconductor surge is also important, with recent reports indicating global spending on AI infrastructure could grow by 35% in 2025, benefiting companies like Synopsys and Lam Research. For sectors that show signs of recovery, such as electric vehicles, we can manage risk through options. After significant price corrections in the EV market during 2023 and 2024, stabilizing demand might indicate a turning point for companies like Stellantis and Ford. Using bull call spreads on these stocks allows us to share in potential gains while limiting our maximum loss in case the recovery doesn’t happen. The rise in speculative stocks, like those in the ARKK and ARKG ETFs, shows a strong appetite for risk. We should expect heightened volatility in biotech, where events like clinical trial results can lead to big price swings. A long straddle on an ETF like ARKG might be a way to benefit from a significant movement in either direction in the upcoming weeks. Adobe’s strong earnings report offers a specific and actionable opportunity. As the stock approaches its 100-day moving average, a key resistance point it has struggled with since the last quarter, there’s potential for a breakout. Buying near-term call options or selling cash-secured puts are direct ways to express a bullish outlook on this positive trend. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Gold prices dropped by $3 to $3,636, and WTI crude oil fell by $1.40 to $62.27. Meanwhile, US 10-year yields decreased by 1 basis point to 4.02%. The S&P 500 increased by 28 points, or 0.9%, reaching 6,590. The Australian dollar gained ground while the US dollar lagged, due to expectations of rate cuts. The euro edged up slightly against the US dollar, highlighting a balanced outlook on growth risks by the ECB. Overall, stock markets surged, led by financial and non-tech sectors.

Jobless Claims Signal

The unexpected rise in initial jobless claims to 263,000 is a key signal for us right now. This marks the highest level since the recovery period of late 2021, indicating that the labor market is loosening. This supports the expectation that the Federal Reserve will cut rates soon. With the S&P 500 reaching a new record at 6,590, now might be a good time to buy call options on broad market indices like the SPX. The rally is expanding beyond tech stocks, so considering calls on financial sector ETFs could be a smart move. The CBOE Volatility Index (VIX) has dropped below 12, reflecting market confidence in this upward trend. The U.S. dollar is weakening overall, and this trend is likely to continue in the weeks ahead. We could use options to bet against the dollar, perhaps by buying calls on the Australian dollar, which recently broke through a key resistance level. Historically, a dovish pivot from the Fed often leads to a period of dollar weakness lasting several months.

Treasury Yields

U.S. Treasury yields are on the decline, with the 10-year yield slipping below 4%. We should consider going long on Treasury futures, as the market now expects multiple rate cuts by the end of the year. The CME FedWatch Tool shows over an 85% chance of the first cut occurring before the November meeting. This situation feels reminiscent of late 2023 when weakening labor data preceded a major stock market rally as the Fed indicated a shift in policy. Although the rise in Texas job claims was unusual, the market’s strong reaction suggests traders are looking beyond it. Thus, we should position ourselves for lower rates and a weaker dollar until new data suggests otherwise. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

The economic calendar for Asia on Friday, September 12, 2025, includes data from New Zealand and Japan, but these updates are not expected to significantly impact the markets. In finance news, the Financial Times reports a plan to impose a 15-20% minimum tariff on all EU goods. This has led to a drop in the EUR/USD exchange rate. Meanwhile, American stock indices such as the Dow, NASDAQ, and S&P 500 have reached record highs.

Jobless Claims and Stock Market Signals

A recent report shows a rise in initial jobless claims, overshadowing the Consumer Price Index data. Tesla’s stock has climbed to its highest level since February, surpassing the summer peak. This occurs as major US indices near their daily highs. A general risk warning has been issued, highlighting that foreign exchange trading carries significant risk, especially with leverage, which can increase both risks and potential losses. Prospective investors are encouraged to evaluate their goals and consult financial advisors. InvestingLive reminds users that its information is for educational purposes only, noting that past performance doesn’t guarantee future results and disclaiming liability for any losses incurred from relying on its content. With a light economic calendar in Asia tomorrow, major movements seem unlikely. Attention should instead focus on the ongoing tensions in US and European markets, indicating a shift toward potential volatility rather than clear trends in the short term. US indices like the S&P 500 have reached record highs, but signs of unease are emerging. The VIX, which measures market fear, has increased from 12 to over 15 in the past week, despite these new highs. This divergence suggests that investors might consider protective put options on broad market ETFs or call options on the VIX to guard against a possible downturn.

Tariffs and Market Strategies

The renewed threat of 15-20% tariffs on EU goods poses a significant risk to the Euro. Past trade disputes, particularly in the late 2010s, have often led to a decline in the EUR/USD exchange rate. Purchasing put options on the Euro or setting up bearish option strategies could be timely as this situation unfolds. We are also facing mixed signals from the US economy. Weekly jobless claims have surged to over 250,000, while the latest CPI inflation report remains steady at 3.1%. This uncertainty about the Federal Reserve’s next moves presents opportunities in interest rate derivatives. Monitoring options on Fed Funds futures could provide a direct approach to changing monetary policy expectations in the weeks ahead. In the single-stock arena, Tesla’s share price breaking its summer high and trading above $310 signals strong momentum for traders. Although buying long-dated call options may be costly due to high implied volatility, it could capture further price increases. A more budget-friendly approach could be a call debit spread to profit from an ongoing rally. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Market Activity Overview

U.S. stock indices are up as the market approaches closing time. The Dow industrial average is leading with a jump of 1.35%. Key players like 3M and Sherwin-Williams each saw increases of over 3%. In the Dow, 3M rose by 3.63% and Sherwin-Williams by 3.06%. Home Depot and Caterpillar also performed well, with gains of 2.52% and 2.10%, respectively. Additionally, UnitedHealth is up 2.54%, and Travelers increased by 2.28%. Financial firms like Goldman Sachs, which gained 2.15%, are contributing to this growth. The S&P index rose by 0.87%, while the NASDAQ climbed 0.75%. The small-cap Russell 2000 exceeded expectations, rising by 1.71% and trading at levels not seen since December 2024. These trends highlight various sectors driving market growth, particularly in home-related and financial stocks. This positive trend shows increased interest and activity among traders. With the Dow and Russell 2000 outperforming the Nasdaq today, we see a shift towards cyclical and value stocks. Traders should seek opportunities outside of the dominant tech stocks of recent years. The strength in small caps, reaching highs not seen since December 2024, reflects an optimistic outlook for the U.S. economy.

Strategic Market Actions

This upward movement is supported by recent strong economic data. For example, the August 2025 ISM Manufacturing PMI came in at 49.2, exceeding expectations and suggesting that the manufacturing slowdown from early 2025 may be stabilizing. Along with stable housing starts around a 1.45 million annualized rate, this provides solid support for the strength in industrial and home-related stocks. For derivative traders, now is the time to consider bullish positions in leading sectors. We might look into buying call options or bull call spreads on industrial and homebuilder ETFs like XLI and XHB to leverage this trend. The strength seen in companies like Caterpillar and Home Depot backs this approach for the coming weeks. The significant rise in the Russell 2000 is especially important. It indicates increased market involvement beyond just a few large-cap stocks. We can take advantage of this by buying call options on the IWM, the ETF tracking the Russell 2000, to benefit from the growing investor confidence. Given the Nasdaq’s weaker performance, a pair trade might be effective. This strategy involves going long on Russell 2000 futures (or IWM calls) while shorting Nasdaq 100 futures (or buying QQQ puts). This position aims to profit from the ongoing market rotation, regardless of the overall market direction. Finally, the strong rally likely reduced market volatility, with the VIX index falling below 15 today for the first time since June 2025. This drop offers a chance to buy protection at a lower cost. We can take advantage of the low-volatility environment to purchase longer-term S&P 500 put options as an inexpensive hedge against unexpected market changes. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Tesla shares have jumped 5.5%, allowing Elon Musk to reclaim his title as the world’s richest person after losing it for a while. The stock price now exceeds the previous high of $367 from May 28, boosted by positive market sentiment regarding potential interest rate cuts. There are still worries about Musk’s future earnings due to possible tax credit reductions and reputation issues. However, Musk’s strong sales skills are pushing the company into robotics initiatives.

Focus On Market Trends

Right now, the market’s attention is shifting away from earnings. The current upward trend hints at a possible return to the highs we saw in 2024. With recent gains for Oracle shares, caution is advised against short positions. As Tesla has surpassed its summer high of $367, short-term implied volatility in the options market has surged over 15% this week to almost 58%. This rise makes buying weekly calls pricier, reflecting strong bullish momentum linked to broader market optimism about interest rate cuts. Traders are willing to pay more for a chance to capitalize on a continued rise toward the highs from 2024. For those optimistic about this trend, the pattern of higher lows is encouraging and similar to the strong rally in the second quarter of 2023. Given the high option prices, we suggest using a risk-defined strategy like a call debit spread, rather than buying calls outright. For instance, purchasing the October $380/$400 call spread could allow for further gains while keeping costs down.

Considerations And Skepticism

However, we need to consider the skepticism surrounding fundamentals. The full phase-out of federal tax credits is likely to pose a 5% challenge to gross margins in the coming quarter. Given the stock’s history of rapid changes, buying long-dated puts for early 2026 could help position for potential downturns without getting trapped in a short-term spike. This strategy gives time for the fundamental factors to possibly outweigh current market sentiment. The current high volatility presents an opportunity for traders anticipating that the stock will eventually stabilize. As seen with Oracle’s surprising rise last week, major tech companies can experience large fluctuations, which is why option premiums are so elevated. We believe that selling an iron condor with strike prices safely outside the recent trading range could be a smart way to profit from time decay and expect a decline in volatility. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Crude oil futures closed at $62.37, down by $1.30 or -2.04%. The day’s high was $63.80, while the low dropped to $62.24.

Sellers Take Over

Prices fell below the 200-hour moving average of $63.59 and the 100-hour moving average of $62.86. Earlier this week, prices rose above the 200-hour moving average due to geopolitical tensions in Russia and Israel. Now, sellers are taking control as prices stay below these averages. The next target is the low from September 8 at $61.94, followed by the September 5 low of $61.45. Sellers are firmly in charge as crude oil settles around $62.37, marking a drop of over 2%. The price has clearly fallen below both the 100-hour and 200-hour moving averages, which were previously supports. This technical weakness signals that the rally from earlier this week, spurred by geopolitical fears, has completely faded. This decline is backed by new data showing weaker global demand. Last week’s EIA report revealed a surprising increase in U.S. crude inventories of 3.1 million barrels, contrary to expectations for a decrease. Along with slower U.S. job growth reported for August 2025, this is lowering expectations for fuel use as we head into the fourth quarter.

Market Implications

On the supply front, the market is reacting to record U.S. crude output, which the EIA states has remained above 13.6 million barrels per day throughout the summer. The lack of deeper production cuts announced by OPEC+ at its August 2025 meeting is now heavily impacting the market. This surplus supply is significantly pushing down prices. For derivative traders, buying put options is becoming more appealing, especially those with strike prices below the key support level of $61.94. This strategy involves a defined risk for betting on a continued price drop toward the next target of $61.45, allowing traders to take advantage of the confirmed bearish momentum. Another strategy to consider is selling out-of-the-money call credit spreads. Since the price failed to break above the 200-hour moving average at $63.59, creating spreads with a short strike price above $64 could be a smart way to earn premium. This reflects a belief that upward movement is now largely restricted by technical resistance and bearish fundamentals. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now