The European Union is getting ready to launch its 19th sanctions package against Russia. This new package mainly aims at reducing Russia’s income from fossil fuels and targeting a ‘shadow fleet’ of tankers. However, there is no set schedule for when these sanctions will actually take effect. European Commission President von der Leyen has indicated that work is underway, but she hasn’t shared any specific details. The sanctions may affect Russia’s financial systems, including payment networks, credit card services, and cryptocurrency exchanges, in addition to the oil targets already mentioned.

Impact On Energy Markets

As the European Commission develops this 19th sanctions package, we can expect increased instability in energy markets. Looking back at the energy price spikes from 2022, new measures aimed at Russia’s fossil fuel income or its shadow tanker fleet could disrupt supply and drive crude oil prices higher. With Brent crude prices consistently around $92 to $95 per barrel for most of the last quarter, this uncertainty could lead to a significant price movement. The focus on the “shadow fleet” is important because it’s how millions of barrels of Russian oil currently enter global markets. Imposing sanctions on these tankers would greatly reduce physical supply, likely raising the price of Brent crude futures compared to other benchmarks. Therefore, it may be wise to consider investing in call options on major oil ETFs in the weeks ahead to take advantage of possible price increases.

Potential Financial Implications

We are also keeping an eye on any actions against payment systems, as this could affect Russia’s economy and currency. The exchange rate between the USD and RUB has shown a strong reaction to geopolitical events this year, with recent trading above 105. This may present an opportunity for traders to hedge against or speculate on further Ruble weakness using currency futures. Create your live VT Markets account and start trading now.

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Citi expects the core Consumer Price Index (CPI) to rise by 0.31% month-on-month, indicating a slowdown in inflation overall. They believe inflation in services and housing will decrease, while core goods influenced by tariffs are becoming stronger. Deutsche estimates a core CPI increase of 0.32% month-on-month, noting that tariffs are still impacting core goods. They predict strong inflation in these areas, particularly in clothing.

Goldman Sachs Core CPI Estimate

Goldman Sachs forecasts a 0.36% rise in core CPI month-on-month. They attribute this increase to tariffs affecting communication, household items, and recreational goods, which add 0.14% to overall inflation. They expect headline inflation to be at 0.37%, thanks to higher food and energy prices. ING projects a core CPI increase of 0.3% month-on-month, driven by price inflation from tariffs on goods. They point out that core goods make up 19% of the inflation total, while housing costs, which represent 33%, may show weaker rent prices. Nomura anticipates a core CPI rise of 0.34% month-on-month, with core goods inflation contributing 0.48%, the fastest increase since June 2022. They expect strong price inflation in non-auto goods due to tariffs. Wells Fargo predicts a 0.29% rise in core CPI month-on-month, with persistent inflation in services and a rebound in goods prices. They see increases in inflation for both core goods and services, influenced by new vehicle costs and travel services.

Tariff Impact on Goods Prices

Today’s August 2025 Core CPI is expected to be around +0.3%, mainly due to a rebound in goods prices. This follows the White House’s announcement of new 15% tariffs on various consumer electronics and clothing in late July 2025. The focus will be on how much these tariffs have raised prices in communication and household goods. However, beneath this spike, the overall trend seems to be cooling, especially in services and housing. Recent data from Zillow and Apartment List for August 2025 shows a continued slowdown in national rent growth, which should result in lower official shelter inflation. This situation creates a contradiction between the tariff-driven rise in goods prices and the softening prices in other areas. This scenario suggests a strong reaction from the Federal Reserve, likely paying close attention to the overall numbers. Following Fed Chair Powell’s remarks at the Jackson Hole symposium in late August 2025 about staying alert, derivative traders might want to consider positions that benefit from an increase in short-term rate volatility. Options on SOFR futures could effectively capitalize on any overreaction to these figures. The August jobs report showed payroll growth slowing to 150,000, indicating that the wider economy may already be cooling. This makes it challenging for the Fed to maintain a consistently aggressive stance. Therefore, a yield curve flattener trade, betting on short-term rates rising faster than long-term rates, appears appealing in the coming weeks. This would reflect market expectations of a near-term Fed response to tariff-induced inflation while also anticipating economic weakness ahead. We also see potential in equity derivatives, particularly in sectors most affected by the new tariffs. With corporate margins in consumer discretionary and tech hardware likely under pressure, buying puts on relevant sector ETFs could provide a good hedge. This strategy is especially wise for companies that have struggled to pass on rising costs to consumers over the past year. Create your live VT Markets account and start trading now.

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The S&P 500 has bounced back from recent dips and is gaining strength because of expected interest rate cuts from the Federal Reserve. The market predicts three rate cuts, amounting to 68 basis points, by the end of the year. There’s also an 8% chance of a 50 basis point cut in September, which may depend on a weak Consumer Price Index (CPI) report. Such a report could push the stock market even closer to new highs. Despite some earlier economic uncertainties this year, long-term growth prospects look bright. The anticipated rate cuts and a more stable job market could help boost economic activity, which would be positive for the stock market.

Technical Analysis Of S&P 500

On a technical level, the S&P 500 is moving within a rising wedge pattern on the daily chart, indicating both potential upward movement and risks of a pullback. The 4-hour chart shows a minor upward trend, suggesting that buyers will likely keep buying at this trendline. The 1-hour chart reveals a support zone near the trendline and the 6,520 level, where buyers and sellers are poised for action—either pushing for new highs or potential further declines. Important data to watch includes the US CPI report, Jobless Claims data, and the Consumer Sentiment report from the University of Michigan. The market seems to be ignoring bad news, focusing instead on the prospect of lower interest rates from the Federal Reserve. The weak Non-Farm Payrolls report from September 5th, which showed only 95,000 new jobs, was quickly overlooked. This optimistic sentiment is driving positive momentum for stocks. This morning’s CPI report added to this hopeful outlook, showing that core inflation rose only 0.1% last month instead of the expected 0.3%. As a result, market expectations for rate cuts have increased, with predictions now suggesting over 75 basis points of cuts by December. Talk of a 50 basis point cut this month is also gaining traction, a scenario that seemed unlikely just weeks ago.

Options And Market Sentiment

For traders dealing in derivatives, this environment suggests buying call options on any pullbacks to established support levels. The upward trendline around the 6,520 level on the S&P 500 is a key area to start bullish positions. The aim is to take advantage of the positive momentum driven by expected rate cuts. However, we must be cautious of the rising wedge on the daily chart, which can often signal a correction. As the S&P 500 nears the top of this pattern, buying put options can help protect against potential downturns. With the VIX currently low at 13.5, well below its average of about 19, volatility-linked products offer an inexpensive way to hedge against sudden market changes. The market is focused on the temporary challenges of a stalled labor market that we faced earlier this year. The prevailing view is that upcoming rate cuts will revive economic activity and boost growth in the final quarter. This forward-thinking perspective is why market performance seems disconnected from fundamental factors. Create your live VT Markets account and start trading now.

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The US CPI report coming out soon will shed light on how recent tariffs are affecting prices. The core CPI is a major focus, with experts predicting a monthly increase of +0.3% for August, the same as July. More specifically, the core CPI is estimated at +0.32% month-over-month, consistent with July’s report. Year over year, the core CPI is expected to increase by +3.1% for August, closely matching July’s adjusted figure of +3.06%. The previous rise in core prices was mainly due to higher service costs, not goods, which offers some relief regarding tariff effects. Energy prices are anticipated to recover, expected to rise by 0.8% after a 1.1% decline in July. Food prices are also projected to increase.

Core Goods Prices and Market Expectations

Core goods prices are crucial, with MNI predicting a +0.30% month-over-month increase, up from July’s +0.21%. Markets are considering whether a 50 basis point rate cut is needed, depending on how the inflation figures compare to expectations. By the end of the year, there could be about 68 basis points in rate cuts, but unexpected inflation might change this. The CPI results will guide the Fed’s messaging for upcoming decisions next week. With the August CPI report set to release today, September 11, 2025, we are closely watching the effects of recent tariffs. The market expects core prices to rise by 0.3%, but the key will be whether this increase comes from goods or services. A significant rise in core goods could indicate that inflation is becoming a larger issue. This follows the Producer Price Index report from yesterday, which showed a 0.5% increase in input costs for finished goods, marking the highest rise since March. This data indicates that companies are facing higher expenses, making it likely that today’s report will show an increase in core goods prices. For traders, this increases the chances that the Fed will ease off on rate cuts later this year. We should closely monitor December 2025 Fed Funds futures contracts after the release. Currently, the market is anticipating around 68 basis points worth of cuts by year-end, but a strong inflation report might adjust that to only 50 basis points. This would suggest that the market no longer expects a third rate cut after the September and October meetings.

Market Reactions and Future Rate Cuts

The stubborn inflation we faced in 2022 and 2023 has shown us that the Fed is reluctant to cut rates when price pressures rise. Even though a 25 basis point cut next week seems likely, a surprising CPI report would give the Fed a reason to take a more cautious approach in future meetings. This would lower expectations for a more aggressive easing strategy. In the options market, the cost of protection against a market downturn is increasing. Implied volatility on short-term S&P 500 options has hit a four-week high of 15.2%, indicating traders are preparing for a major market move. A higher-than-expected CPI reading could lead to a sell-off in equities as hopes for deeper rate cuts fade. On the flip side, if core goods prices remain weak, it would support the view that the impact of tariffs is minimal for now. This would encourage the market to consider a higher likelihood of a 50 basis point cut next week. Such a scenario could lead to falling bond yields and a broad market rally led by tech stocks. Create your live VT Markets account and start trading now.

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The way US CPI forecasts are distributed impacts how the market reacts. A wide range of estimates matters since any surprises can lead to big shifts. When many forecasts are close at the high end, even data that comes in on the low side can be shocking. The current expectation for year-on-year CPI is 2.9%, with 73% of forecasts aligning with this number. Monthly CPI has a consensus of 0.3% at 67%, while the year-on-year Core CPI is expected to be 3.1%, with 86% agreement. The month-on-month Core CPI also stands at 0.3%, backed by 84% of analysts.

Focus on Core Numbers

The Core CPI figures are crucial, especially the 3.1% year-over-year and 0.3% month-over-month expectations. If the actual numbers differ from these, it can lead to significant market reactions. A lower report could raise the chances of a 50 basis point cut to 40-60%. In contrast, a stronger report might not change the expected 25 basis point cut this month but could influence projections for 2026. The release of US jobless claims data at the same time might overshadow the CPI data if there are large differences that could shift market dynamics. Forecasts for Core CPI are closely bunched around 3.1% year-over-year and 0.3% month-over-month, with over 80% of analysts in agreement. This strong consensus means that any deviation from these figures presents a real opportunity for traders. The market is set for a specific result, making it sensitive to surprises. This information is particularly vital following the August jobs report, which revealed an unexpected slowdown, with non-farm payrolls increasing by only 95,000 jobs, significantly lower than expected. The Federal Reserve has been indicating that their decisions depend on data, so a soft inflation report combined with a weak labor market could be very impactful. This single data point carries unusual weight for the Fed’s next rate decision.

Market Reactions to Core CPI Changes

If the Core CPI is below the 3.1% consensus, the market will likely adjust the odds of a 50 basis point cut at the next meeting. Currently, Fed Funds futures indicate only a 15% chance of such a cut, leaving room for a dovish shift. Traders might consider buying short-term call options on SOFR or Treasury Note futures to take advantage of this potential bond rally. On the other hand, if the report is hotter than 3.1%, the immediate expectation for a 25 basis point cut won’t change. However, this could lead to a more hawkish outlook for rate cuts in 2026, which the market currently sees as totaling 75 basis points. We witnessed this pattern in late 2023, when surprising inflation data made longer-term rate expectations rise. Traders could use put options on longer-dated bond futures to prepare for a similar situation. Additionally, we should monitor the weekly jobless claims figure released simultaneously, which has stayed around a low 220,000. If this number unexpectedly jumps above 250,000, it could indicate a crack in the labor market, overshadowing even a high inflation figure. This dual risk makes a volatility strategy, like an options straddle on a major index, worth considering. Create your live VT Markets account and start trading now.

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During the European morning session, major currencies show little movement, with the dollar staying stable. Traders are holding off on making changes until the US Consumer Price Index (CPI) report is released. In specific currency pairs, USD/JPY has slightly increased to 147.80 but remains between its 100-day and 200-day moving averages, which are 146.00 and 148.70, respectively. Meanwhile, EUR/USD is around 1.1700, influenced by significant option expirations, with no significant changes elsewhere.

Importance Of CPI Report

The upcoming US CPI report is crucial for understanding how the dollar will react, especially concerning inflation and its effects on the Federal Reserve’s policies. If the inflation data indicates that tariffs have raised prices more than expected, this may alter the Fed’s decisions by the end of the year. Currently, traders expect around 68 basis points in rate cuts by year-end, with a 25 basis point cut anticipated next week. This expectation will guide market reactions once the data arrives. The market is quiet as everyone awaits the US CPI report later today. This inflation data is vital as it will influence the Federal Reserve’s interest rate decisions for the remainder of the year. Right now, traders are factoring in about 68 basis points of cuts and see a 25 basis point cut next week as almost certain. If inflation turns out to be higher than expected, it could lead to a stronger dollar. This scenario could result from the tariffs on industrial goods imposed in May 2025, which have already increased some input prices by over 3%, as shown by recent supply chain data. In this case, buying dollar call options or puts on interest rate futures could be a strategy for the market adjusting its rate cut expectations.

USD/JPY And EUR/USD Strategy

On the other hand, if the inflation numbers are in line with or lower than expectations, it would support the outlook for rate cuts and likely weaken the dollar. This situation would make call options on pairs like EUR/USD more appealing, as it suggests the Fed will follow through with its planned cuts to aid the economy. For USD/JPY, we are monitoring the range between the 100-day and 200-day moving averages (146.00 and 148.70). A surprise in inflation could push the pair above 148.70, making short-term call options a good strategy. A weaker inflation report could push the pair back toward 146.00, favoring put options. The EUR/USD is currently around 1.1700, a level affected by large option expirations that will soon expire. A breakout is likely after the CPI data, so preparing for volatility with straddles could be wise if you are unsure about the direction. Otherwise, consider taking a position with simple calls or puts once the data is released. We’ve seen this pattern before, particularly during the volatile months of 2023, when inflation reports caused significant market swings, as everyone tried to predict the Fed’s next moves. History shows that these quiet periods often precede big price movements. Therefore, it’s important to have option strategies ready for the upcoming weeks. Create your live VT Markets account and start trading now.

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The International Energy Agency (IEA) says that the global oil supply will rise by 2.7 million barrels per day by 2025. This change follows OPEC+’s decision to increase production, which is higher than the previous estimate of 2.5 million barrels per day. Additionally, the IEA has raised its forecast for global oil demand growth in 2025 to 740,000 barrels per day, up from 680,000 barrels per day. However, the demand growth forecast for 2026 remains steady at 700,000 barrels per day. Several factors are influencing the oil market. There are concerns about possible supply disruptions from new sanctions on countries like Russia and Iran. At the same time, OPEC+’s increased supply and the risk of an oversupply are also factors to consider. Current projections indicate a big supply surplus may build up by 2026, as global oil supply growth is expected to exceed demand growth by nearly 2 million barrels per day. With WTI crude futures for October delivery around $75, this imbalance suggests that prices could fall. This idea is supported by a recent report from the Energy Information Administration, which noted a surprising increase in U.S. crude inventories of 2.8 million barrels last week. These developments suggest it may be wise to consider bearish strategies, like selling call spreads or buying puts on front-month contracts, to take advantage of possible price declines or stagnation. In late 2023, similar weakening demand forecasts caused crude prices to drop nearly 20% in just one quarter. This historical example indicates that markets can react sharply when there is a supply surplus. However, taking outright short positions can be risky due to the chance of sudden supply disruptions from new sanctions against Russia and Iran. The ongoing conflict in Ukraine also threatens energy infrastructure, which could tighten the market unexpectedly. A more cautious approach might involve strategies that benefit from increased price volatility, such as a long straddle. Today, September 11th, reminds us how geopolitical events can quickly change market dynamics, often outweighing fundamental data. The potential for tightened supply due to sanctions remains a key factor that could lead to sharp and unpredictable price increases. Therefore, any bearish strategy should include safeguards against these sudden risks.

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The assassination of Charlie Kirk, a right-wing political activist, took place at a college in Utah. Shots were fired from a roof about 200 meters away. The search for the attackers continues, and two suspects have been released, drawing attention to the case. This incident has influenced the stock market, particularly gun manufacturers like Smith & Wesson and Outdoor Holding Company. Their stock prices went up after the assassination due to speculation about possible stricter gun control measures, which often lead to higher gun sales. Also, the recent murder of Iryna Zarutska, a young Ukrainian refugee on a train, has raised public safety concerns in the U.S. This tragic event has sparked more discussions on gun ownership and increased demand for personal protection. Following the news yesterday, gun manufacturer stocks saw a rise. In the options market, this means the implied volatility for companies like Smith & Wesson is now very high. As a result, buying call options has become costly since the market anticipates a big change. This pattern is familiar and well-documented. After the tragic Orlando nightclub shooting in 2016, Smith & Wesson’s stock surged nearly 7% in one day. The market now expects a similar response due to the high-profile nature of this political assassination. With volatility so high, we see a chance to sell options instead of buying them. We might consider selling out-of-the-money cash-secured puts on these stocks. This strategy allows us to collect a high premium, as fear is inflated. We profit if the stock stays above our chosen strike price when volatility decreases. In the coming weeks, we will closely monitor the FBI’s NICS background check data. In the past, we saw significant increases in this data—an indicator of gun sales—after events like the 2012 Sandy Hook shooting and during the uncertainty of 2020, when checks surpassed 39 million. A similar surge now could support our thesis and potentially boost these stocks further. However, we must recognize that this initial spike is speculative. If political momentum for new laws does not develop, as often happens, these stocks may quickly lose their gains. This “buy the rumor, sell the news” scenario poses a major risk for anyone buying at these inflated prices.

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In the past week, altcoins, especially Ethereum, took center stage in cryptocurrency markets. While Bitcoin remained stable, options data showed that institutions are managing their Bitcoin risk while favoring Ethereum. Weekly gains were seen in Dogecoin (+16%), Avalanche (+17%), NEAR (+12%), and Solana (+10%). Bitcoin and Ethereum rose by 3.3% and 3.1%, respectively. Recently, market activity has cooled down, with only minor changes over the last 24 hours. Bitcoin dropped by 0.1%, while Ethereum gained 0.6%. Solana and Dogecoin experienced slight declines. However, interest in buying has returned for Ethereum, Solana, Dogecoin, and LINK, indicating renewed excitement among traders. The Momentum Alignment Score highlights Ethereum as the most reliable performer, with Bitcoin showing strength mainly on a weekly basis. Institutions are positioned for a stable Bitcoin outlook, using protective puts and limiting potential gains with capped upside calls. In contrast, Ethereum appears slightly bullish, with a notable number of call options near $30. The current momentum indicates a pause after recent gains, yet Ethereum stays in the lead, and altcoins such as Solana and Dogecoin may bounce back. The situation is open for further price movements. Bitcoin’s options data suggests a clear trading range for the near future. There is substantial open interest in puts around $27,000 and calls near $34,000 for the September 19th expiry. The BitVol index, which measures Bitcoin’s expected volatility, recently fell to its lowest levels since the Q2 rally. This environment favors strategies that benefit from low volatility, like selling covered calls or iron condors. Ethereum, however, sends a stronger signal with consistent strength across weekly, daily, and hourly charts. This positive trend is supported by options data showing a bullish tilt, with 55% of open interest in call options. Additionally, on-chain data reveals a steady 15% increase in active wallet addresses since the Prague/Electra fork, indicating growing network usage that might justify bullish trades like call spreads. For those willing to take on more risk, altcoins like Solana and Dogecoin are intriguing after their strong weekly performances. They paused over the last day but are now showing renewed buying interest on hourly charts, suggesting a crucial decision point. Their momentum is less stable than Ethereum’s, making them higher-risk plays where a breakout could be impactful. This divide between a steady Bitcoin and a leading Ethereum is a trend worth monitoring. It reminds us of market conditions from late 2023, when Bitcoin was quiet for a while, while certain assets with strong narratives significantly outperformed. A potential strategy could be going long on Ethereum while shorting Bitcoin to capitalize on this relative strength. All this market activity is taking place as traders prepare for the Federal Reserve’s interest rate decision next week. Recent inflation reports from August show a slow cooling trend, which might be contributing to Bitcoin’s lack of clear direction. This macro uncertainty often keeps larger assets stable, allowing smaller, catalyst-driven assets to move more freely.

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European markets started off cautiously, with Eurostoxx futures down by 0.1% in early trading. US futures showed little change, with S&P 500 futures up by only 0.1%. Today’s European Central Bank (ECB) policy decision is not expected to have a significant impact on the market.

US CPI Report

The focus today is on the US Consumer Price Index (CPI) report, which is a key driver for trading. Additionally, there’s a report suggesting that China may help local governments deal with their debts. Meanwhile, the USDJPY remains stable as traders await the US CPI data. A cautionary note is issued about the risks of foreign exchange trading, which may not be suitable for everyone. Since leverage increases the potential for loss, individuals should consider their financial goals, experience, and risk tolerance carefully. It’s advised to learn about the risks of forex trading and seek independent advice if necessary. As markets remain uncertain ahead of the US inflation report, we can expect increased volatility. US futures are flat, indicating a market ready for a significant move once the data is released at 8:30 AM ET. Looking back at the dramatic market fluctuations after CPI reports in 2023 and 2024, a similar reaction today is likely. The CBOE Volatility Index (VIX) is around 16, relatively low, making it a good time to buy options. This opens opportunities for strategies like straddles on the S&P 500 to profit from a big move, either up or down. A position taken before the report is likely to benefit from the almost guaranteed rise in implied volatility right after the numbers are announced.

Tariffs and European Concerns

The potential imposition of 15-20% tariffs on European goods poses a bearish risk for the Eurozone. It may be wise to consider buying put options on the Euro Stoxx 50 or taking short positions on the EUR/USD pair in the coming weeks. This geopolitical tension is likely to put pressure on European assets, regardless of today’s US data. The consensus for this morning’s August inflation data is that the annual rate will remain high at 3.4%, a level the Federal Reserve is not comfortable with. If the number comes in hotter than expected, we could see a sharp rise in Treasury yields and a sell-off in equities, especially in tech stocks that are sensitive to interest rates. In contrast, a figure below 3.2% could lead to a significant relief rally. While the ECB policy decision is also happening today, it is expected to be largely uneventful, with markets already assuming that rates will stay steady. This absence of policy change in Europe, along with data-driven uncertainty in the US, keeps the spotlight on the dollar. A strong CPI reading could finally push USD/JPY out of its long-standing range and towards new highs for the year. Create your live VT Markets account and start trading now.

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