Citi predicts that silver prices will hit USD 43 per ounce in the coming months. The forecast for Brent crude oil in 2026 has dropped from USD 65 to USD 62 per barrel. The bank is also optimistic about natural gas (Henry Hub), setting a short-term target of USD 3.8 per MMBtu and expecting it to exceed 11k by the end of 2026. For aluminium, Citi is equally optimistic as for copper, raising the average price forecast for 2027 from USD 3,000 to USD 3,500 per ton. These insights come from Reuters. Given the prediction for silver to reach $43/oz, we should consider opening long positions via call options or futures contracts expiring next quarter. This approach is backed by the Federal Reserve’s dovish signals from its August 2025 meeting. Such signals usually weaken the dollar and support precious metals. Additionally, industrial demand remains strong, with solar panel producers increasing their silver orders by 12% in Q2 2025 compared to the previous year. With Brent crude oil’s reduced forecast for 2026 at $62/bbl, it may be wise to adopt longer bearish positions. In the coming weeks, we could sell call spreads or buy puts for mid-2026 to prepare for this anticipated decline. The latest EIA report showed an unexpected inventory increase of 2.5 million barrels, and concerns about slowing economic growth in Europe are impacting future demand. The positive short-term target for natural gas at $3.8/MMBtu presents a good opportunity as we approach the winter heating season. We should consider purchasing November or December 2025 futures contracts, as early forecasts predict a colder-than-normal start to winter in key consumption areas. U.S. natural gas storage is currently about 4% below the five-year average, which adds pressure on prices. With a promising long-term outlook for aluminium, we can start building positions in contracts for 2026 and 2027. The expected increase to $3,500/ton is driven by aluminium’s vital role in the green energy transition, especially for electric vehicles and renewable infrastructure. We’ve seen similar trends during 2021-2022 when supply issues and high energy costs pushed prices to record highs.

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JPMorgan has reported a slowdown in the strategy of buying currencies backed by strong economies. This approach, which was very profitable earlier this year, has lost its momentum. Currencies like the Swiss franc, Norwegian krone, Swedish krona, and Australian dollar have done better than weaker currencies such as the British pound and Japanese yen earlier this year. However, in the past month, the advantage linked to these strong economies has decreased. Even though the economic fundamentals looked promising and long-term bond yields in developed markets have risen, these stronger currencies have struggled. JPMorgan explains this drop is due to changes in short-term yield gaps, which have affected gains. A once-reliable strategy in foreign exchange is now faltering. Most of 2025 was profitable for buying currencies from financially strong countries, like the Swiss franc and Australian dollar, while selling those from economies in trouble, like the British pound and Japanese yen. Recently, however, this strategy has started to lose money. The issue is that short-term interest rate expectations now have more influence than longer-term economic factors. For instance, the yield advantage of 2-year Australian government bonds over Japanese bonds has recently decreased by about 35 basis points, making the Australian dollar less appealing in the short term. This change follows slightly lower inflation data from Australia in August 2025 and a less aggressive approach by the Bank of Japan in its bond-buying. In the UK, short-term bond yields have remained steady as wage growth data from July came in high at 5.9%. This suggests that the Bank of England needs to be cautious, providing short-term support for the pound against stronger currencies like the Swiss franc. The market is now paying more attention to immediate actions from central banks rather than the long-term economic outlook. For those trading derivatives, this shift means that betting on simple currency trends has become riskier. The breakdown of a previously popular strategy has led to increased volatility for currency pairs like GBP/CHF, with 3-month options volatility rising from about 6% to over 7.5% in recent weeks. This suggests that buying options to guard against sudden price changes could be a smart move. Instead of straightforward currency trades, this situation favors strategies that profit from uncertainty, such as straddles or strangles in key currency pairs. We recall the sharp reversals in late 2022; when a market-wide strategy falters, the transition can be chaotic and volatile. It’s not a time for complacency, as the dynamics driving currency markets are clearly shifting.

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The American Petroleum Institute (API) recently conducted a private survey on oil stocks in the U.S. They anticipated a decrease in the following: – Crude oil: 2 million barrels – Distillates: 0.6 million barrels – Gasoline: 1.1 million barrels This survey includes data from oil storage facilities and companies. Meanwhile, the official data from the U.S. Energy Information Administration (EIA) is coming soon. This report, based on information from the Department of Energy and other agencies, gives a complete overview of the oil market. It details refinery inputs and outputs, along with storage levels for different types of crude oil—light, medium, and heavy.

API Report and Comparison

The API report sheds light on total crude oil storage levels and weekly changes. On the other hand, the EIA report is regarded as more reliable, offering an in-depth analysis of the oil market. It examines key indicators affecting oil storage and overall market conditions. Together, these reports present different angles of the oil landscape. We often see that the private survey figures influence market sentiment before the official data comes out. Still, the government’s EIA report, released tomorrow morning, is what truly impacts prices because it is seen as far more thorough and accurate. We need to pay attention to how much the EIA report deviates from these private figures and the market’s expectation of a 2 million barrel drop in crude. With the possibility of unexpected results, we’re exploring options strategies that could benefit from a sudden price shift in the coming days. A significant deviation in the EIA report could lead to considerable market volatility, making it worthwhile to bet on that volatility before the numbers are announced. For example, buying both a call and a put option on a major oil ETF could be profitable if the price moves sharply, either up or down, tomorrow. We should also note that we just passed Labor Day weekend, which signals the end of the peak summer driving season in the U.S. Gasoline demand typically decreases seasonally through September, which might lessen the impact of any draw in gasoline stocks. Additionally, recent job data was slightly weaker than expected, raising concerns about overall economic demand as we approach the fourth quarter.

Supply Concerns and Market Impact

On the supply front, the market is anxious about possible disruptions in the Gulf of Mexico, especially during this peak hurricane season. Looking back at Hurricane Ida in 2021, we see how such events can quickly tighten the market for weeks. This unease comes as we await insights from the next OPEC+ meeting, with current production cuts keeping WTI crude prices steady at around $86 per barrel. So, while tomorrow’s inventory report is the immediate focus, it is framed by tight existing supply. U.S. crude inventories are already about 4% below the five-year average for this time of year, making any large draw more impactful. If the draw is bigger than expected, it would confirm this supply tightness and likely push prices up, despite the usual seasonal slowdown in demand. Create your live VT Markets account and start trading now.

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Reserve Bank of Australia Deputy Governor Andrew Hauser will have an interview at 11 AM Sydney time. This is 1 AM GMT and 9 PM US Eastern time. While the exact topics are not disclosed, the discussions will likely focus on the Australian economy and the RBA’s monetary policy. In other news, Former President Trump is pushing for a 15-20% minimum tariff on all EU goods. This news has impacted the currency market, leading to a drop in EUR/USD. A recent private survey has also shown a rise in crude oil inventory, which goes against expectations for a decrease.

Record Fine Issued

France’s data protection authority has fined Google a record 325 million euros. In the US, the JOLTS report and the Federal Reserve’s Beige Book indicate a slowing economy. The bond market has shown signs of relief. Furthermore, a Republican Senator is taking a position in the ongoing Lisa Cook situation. After the Reserve Bank of Australia’s Governor provided little information yesterday, Deputy Governor Hauser’s comments are now more significant. The CPI for August 2025 showed a persistent 3.1%, suggesting that any hawkish remarks could greatly impact the Australian dollar. Traders might consider buying short-dated AUD/USD options for potential volatility spikes, as a straddle could yield profits regardless of the market direction. The push for tariffs on EU goods poses a clear risk to the euro. This action is backed by recent data showing the US trade deficit with the EU widened to over $22 billion in July 2025. With escalating trade tensions, buying EUR/USD put options seems a simple way to prepare for further euro weakness.

Economic Slowdown Effects

The slowing US economy is confirmed by the JOLTS report and the Fed’s Beige Book, indicating that the Federal Reserve’s tightening cycle may now be over. The August 2025 JOLTS data showed job openings dropped to 8.1 million, signaling a softening labor market and reducing wage pressures. We are considering long positions in 10-year Treasury note futures, expecting yields to continue falling as the market anticipates possible rate cuts in early 2026. The unexpected increase in crude oil inventories suggests weakening demand, aligning with the broader economic slowdown. The API reported a significant 3.2 million barrel build, and if the official EIA data supports this, oil prices may still decline further. Buying put options on WTI crude futures for the upcoming weeks offers a low-risk strategy to bet on falling prices, especially as concerns about a global slowdown grow. Create your live VT Markets account and start trading now.

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Forex news during North American trading highlighted significant changes in economic data and market reactions. The JOLTS report revealed US job openings fell to 7.181 million in July, below the expected 7.378 million. The Beige Book indicated little to no change in economic activity across most areas, hinting at a slowing economy. Federal Reserve officials showed a cautious stance. Waller commented on the fast-changing labor market, while Kashkari emphasized the need to keep working towards a 2% inflation target. Musalem expressed confidence in the current restrictive policy. In Canada, Carney mentioned that the upcoming budget aims to balance austerity with investment. Market movements mirrored these developments. Gold surged by $30, reaching a new high of $3,578, while WTI crude oil dropped by $1.78 to $63.80. The British pound gained the most as the US dollar weakened, influenced by the softer JOLTS data. The S&P 500 rose by 30 points to 6,446, despite daily fluctuations. US 10-year yields fell by 5.6 basis points, landing at 4.22%. Concerns about rising oil supply due to increased OPEC production also impacted pricing. Recent economic data, especially the JOLTS report, shows a clear softening in the US labor market. For the first time since 2021, job openings have fallen below the number of unemployed individuals, a crucial signal for the Federal Reserve. This supports Fed member Bostic’s belief that a rate cut may be appropriate before the year ends. This outlook suggests preparations for lower interest rates soon. US 10-year yields have already decreased to 4.22%, and derivatives traders might want to adopt strategies that profit from this trend as the market anticipates a Fed policy change. With the July unemployment rate rising to 4.1%, today’s data confirms that the labor market is finally easing. Consequently, the US dollar is weakening, and we expect this trend to continue. Selling the dollar against strong currencies like the British pound seems like a solid strategy. Options betting on further declines in pairs like USD/JPY may also be attractive, given today’s significant selling. In the equity markets, the idea that “bad news is good news” is pushing stocks higher on the promise of rate cuts. The late-day rallies in the S&P 500 for two days indicate underlying strength, making it sensible to buy call options on dips. However, caution is advised due to intra-day volatility, as a slowing economy could eventually hurt corporate earnings. Commodity markets are showing clear differences that offer opportunities. Gold’s rise to a record high above $3,500 indicates a move towards safety and protections against falling rates, encouraging long positions. In contrast, oil prices are declining due to anticipated OPEC supply increases and lower demand from a slowing economy, making put options or short futures on WTI crude oil appealing. We have seen similar patterns before, for instance in 2019 when the Fed shifted from rate hikes to cuts after the economy showed signs of cooling. That change happened swiftly once the labor data shifted, and today’s numbers suggest we may be at a similar turning point. The key now is to position for this policy change before the first rate cut is officially announced.

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US 30-year Treasury yields have dropped by 7.3 basis points. Concerns about rising Treasury yields often stem from fears of the US heading towards bankruptcy and the influence of politics on the Federal Reserve, which might impact inflation expectations. Earlier, global markets reacted anxiously when UK 30-year bonds reached their highest levels since 1998, causing yields to rise worldwide. US 30-year yields approached 5%, a troubling point for the market.

Economic Sentiment Shift

However, the mood changed after a disappointing JOLTS job openings report and the Beige Book indicated economic stagnation. This led to yields falling by 11 basis points from their peak to 4.89% by the end of the day, though they didn’t fully return to the lower levels observed the previous week. The 30-year Treasury hitting 5% caused widespread concern on trading desks. Thankfully, weak economic data provided some relief, bringing yields back down to 4.89%. This decline suggests that the intense worry about rising rates is easing for now. The recent JOLTS report, showing job openings fell to 8.5 million, confirmed the cooling labor market we’ve anticipated. This trend was echoed by the Beige Book’s mentions of economic stagnation, indicating that the Federal Reserve’s earlier rate hikes are significantly impacting the economy. With August’s CPI moderating to 3.4%, down from July’s 3.6%, the pressure for more aggressive action from the Fed is lessening. For derivative traders, it may be wise to sell out-of-the-money call options on Treasury futures (/ZB), betting that yields won’t surpass the 5% mark in the near future. There’s clear resistance at this psychological level. The decline in yields also makes rate-sensitive growth stocks more appealing, suggesting a potential strategy of buying near-term call options on the Nasdaq 100.

Relief Rally and Market Implications

The relief rally indicates a decrease in overall market anxiety, making it a good time to bet on lower volatility. We saw the VIX fall below 15 after the economic data was released, and selling VIX futures could be profitable if stability continues. This trend might persist as we approach the next FOMC meeting later this month. This week’s rise in global yields reminded us of the UK gilt crisis from the fall of 2022. It shows how sensitive markets are to any signs of fiscal trouble from major governments. This serves as a reminder that these relief rallies can be delicate and that the risk from headlines remains significant. Create your live VT Markets account and start trading now.

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The Beige Book, created by the Philadelphia Fed, showed that most districts saw little or no change in economic activity. Companies remained generally optimistic, but their expectations for the future varied. Ten districts reported price increases as either moderate or modest. Overall, the report suggests stability instead of strong growth, indicating a steady but unremarkable economic situation. This data gives us a snapshot of the current US economy, based on anecdotal evidence. Observations point to a consistent but unexciting economic path recently. Recent reports suggest that economic growth is slowing down. This implies that making strong directional bets is riskier. We should look for strategies that can profit when the market is moving sideways or losing upward momentum. The latest data supports this view. The Consumer Price Index (CPI) report for August 2025 showed an inflation rate of 2.8%. While this is a big improvement from the high inflation we faced in 2023, it’s still not low enough for the Fed to confidently lower interest rates. This uncertainty can keep markets stuck in a range, making it hard for breakout traders. We also see signs of weakness in the labor market, with the last non-farm payroll report showing only 150,000 new jobs—much less than expected. Without strong catalysts, implied volatility may stay low. In the coming weeks, selling options on major indexes with defined-risk strategies could be a smart move. As the market continues to adjust to the significant interest rate hikes from the past few years, a period of consolidation makes sense. A sideways market can be tricky, so we need to be patient. Calendar spreads might be beneficial, allowing us to profit from time decay as we wait for clearer trends later in the year. The biggest risk in a stagnant market is a sudden negative event that breaks the current range. To protect ourselves, we should think about adding some inexpensive, out-of-the-money puts to our portfolio. This way, we can keep our core range-bound positions while also being ready for any unexpected downturns.

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The Federal Reserve is working hard to lower inflation to its 2% target, according to the President of the Minneapolis Fed. Although inflation is still high, there are signs that the labor market is starting to slow down. People are paying close attention to the voting results from the September meeting. It’s important to keep an eye on inflation linked to tariffs as goods prices are rising due to these tariffs.

Current Economic Indicators

Recent data shows that the economy is slowing and moving toward a soft landing. The Federal Reserve is in a tough spot regarding its goals. The Fed is not done addressing inflation and aims to reach its 2% target. The Consumer Price Index (CPI) report for August 2025 shows stubborn inflation at 3.4%. This strict position persists even with other data suggesting a slowdown, creating a challenging situation for the market where policy discussions don’t match economic realities. There are clear signs that the labor market is cooling, as shown by the latest jobs report which recorded only 150,000 payrolls, falling short of expectations. This indicates the economy is likely moving toward a soft landing. As a result, the rate decision at the upcoming September Fed meeting is highly uncertain for traders.

Market Volatility and Fed Meetings

Given these mixed signals, we can expect increased market volatility in the coming weeks. The options market for the S&P 500 already reflects this anticipation. We expect the VIX index, currently around 18, may rise toward its recent highs as we near the Federal Open Market Committee (FOMC) meeting. This situation brings back memories of the market tension before key Fed meetings in 2023. In the rates market, derivatives linked to the Fed Funds Rate indicate about a 40% chance of another quarter-point increase by the end of the year. Traders will use SOFR futures and options to manage risks or speculate on a surprise rate hold. The possibility of a split vote hints that the policy statement itself will be as significant as the rate decision. Additionally, we need to be aware of inflation pressures from factors outside the Fed’s control, such as new tariffs on consumer electronics and auto parts. These tariffs are keeping goods inflation high, complicating the central bank’s tasks. It would be wise to consider options to protect against downside risks in retail and manufacturing ETFs that are most affected by these import costs. Create your live VT Markets account and start trading now.

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The US stock market is getting a lift thanks to Google, whose shares have risen by 8%, and Apple, which has seen a 3.5% increase after a recent anti-trust court ruling. However, sectors like energy, finance, transportation, and industry are facing challenges today, along with the consumer sector. DollarTree’s shares fell by 8%, and McDonald’s is struggling to serve low-income customers. The market hasn’t maintained the rally from yesterday, as the news about Google was expected to promote further growth. Yet, worries about politics and tariffs have dampened excitement. Yields have come down from their previous highs, but the market remains cautious. September has historically underperformed, and the upcoming jobs report this Friday might add to the anxiety. The strong performance of a few tech giants like Google and Apple gives a false impression of market health. We should be careful with this limited leadership and think about defensive strategies. Buying put options on broad market ETFs like the SPY or on weaker sectors such as financials (XLF) can effectively protect against a market downturn. The struggles of low-income consumers, highlighted by DollarTree’s situation, raise serious concerns about the overall economy slowing down. Recent data shows that U.S. credit card delinquencies rose to 3.5% in the second quarter of 2025, the highest since 2012. This makes investing in long call options on consumer discretionary stocks risky in the upcoming weeks. With the important monthly jobs report arriving this Friday, we can expect increased volatility. August’s report indicated a cooling job market, with the unemployment rate rising to 4.1%. Traders are paying close attention to this release for signs of continued weakness. A long straddle strategy on the QQQ could be useful, as it benefits from significant price movements in either direction without needing to guess the report’s outcome. It’s important to remember that September is typically the worst month for stocks, with the S&P 500 averaging a 1.1% decline since 1928. This historical trend, along with the current market’s weak performance, is reminiscent of conditions before the market correction in late 2021. As a result, selling out-of-the-money call credit spreads could be a sensible way to generate income while betting on limited upside potential.

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Oil prices have been fluctuating due to mixed reports about OPEC’s production activities. Initially, a Reuters report indicated that OPEC+ might announce a new increase in output over the weekend, which led to a drop in oil prices. Later, Bloomberg reported that OPEC had increased production by 400,000 barrels per day in August, following their planned production boost. This news caused a brief rise in oil prices, with West Texas Intermediate (WTI) gaining about 80 cents. The initial drop and subsequent increase in oil prices highlight the uncertainty in the market about OPEC’s future production plans. Despite a week of volatility, no clear information has emerged regarding OPEC’s upcoming announcements. The market is showing cautious anticipation regarding possible changes in OPEC’s production strategies. It’s unclear how these developments will affect the global oil market in the days ahead. We are witnessing a classic tug-of-war in the oil market, and the recent fluctuations signal what is to come. The conflicting reports about OPEC+ possibly increasing output are causing significant intraday volatility. For derivative traders, betting on a clear upward or downward trend is becoming riskier. Given this uncertainty, monitoring volatility itself might be a more strategic approach. Recall the sharp price swings in late 2023 when similar OPEC+ rumors led to spikes in options premiums. As of September 2025, implied volatility for front-month WTI options has risen to over 35%, up from an average of 28% just last month. On the demand side, conditions remain supportive of prices, countering the narrative of increased supply. China’s manufacturing PMI for August 2025 unexpectedly rose to 50.9, indicating stronger energy consumption than expected. This occurs as U.S. inflation data has eased, prompting the Federal Reserve to suggest pausing further rate hikes, which is usually positive for economic growth. Additionally, we should closely monitor U.S. production figures as a counterbalance to OPEC+. Recent EIA data shows U.S. crude output stable near a record 13.7 million barrels per day. Any significant increase in weekly inventory builds could quickly erase price gains from OPEC headlines. Therefore, strategies that benefit from large price movements, regardless of direction, are likely the best course in the coming weeks. Buying straddles or strangles ahead of the next official OPEC+ meeting lets traders take advantage of the price swings we are experiencing. The current market requires less focus on direction and more on being prepared for the inevitable reactions to the next news update.

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