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Today’s agenda is light, with final PMI readings and the Eurozone unemployment rate likely to have minimal impact.
The calendar is mostly clear today due to a US holiday. The main items on the agenda are the final PMI readings and the Eurozone unemployment rate, but these are unlikely to influence central banks or markets.
ECB speakers are expected to repeat familiar messages, with no signs of immediate changes to interest rates. Right now, there is no strong reason for the ECB to adjust rates.
Eurostoxx and German DAX futures rise slightly in early European trading, while UK FTSE stays the same
In early European trading, Eurostoxx futures increased by 0.2%. German DAX futures also rose by 0.2%, while UK FTSE futures stayed the same.
At the end of August, trading was slow for stocks, and the mood remains cautious as a new week begins. S&P 500 futures dipped by 0.1%, but with a US holiday today, Wall Street won’t impact the session. European markets will act on their own, paying close attention to recent discussions about tariffs proposed by Trump.
Slow Start to September
With US markets closed today, Europe is experiencing a cautious start to September. The small gains in futures do not disguise underlying worries, especially with renewed talks about US tariffs on European goods. This brings a likelihood of increased market volatility. The VSTOXX index, which tracks Euro Stoxx 50 volatility, has already risen to 18, showing traders’ growing unease. Since the VSTOXX spiked above 30 during the 2018-2019 tariff disputes, there is potential for even higher volatility. Buying VSTOXX futures or call options could be a smart move to prepare for this expected turbulence. In addition to trade issues, inflation continues to be a problem. Recent Eurozone figures showed inflation stubbornly at 2.9%, slightly above expectations. This raises concerns for the European Central Bank ahead of its interest rate decision this month. If the ECB takes a surprisingly aggressive stance, it could further push markets down.Strategies for Managing Risk
Given the risks from trade and interest rates, it’s important to protect our long positions. We should think about buying put options on major indices like the DAX and Euro Stoxx 50. This offers a solid defensive strategy against a potential market decline in the coming weeks. For those willing to take more risks, the higher volatility presents its own opportunities. Selling options to collect premiums, using strategies like iron condors, can be profitable if we expect the market to remain unstable but within a certain range. This approach benefits from the decay of option prices over time, especially when implied volatility is high. Create your live VT Markets account and start trading now.In August, UK house prices fell to £271,079 due to affordability issues and borrowing costs.
The average price of homes in the UK fell slightly in August to £271,079. Month over month, house prices dropped by 0.1%, which was different from the expected rise of 0.2%.
When compared to last year, the annual growth in house prices slowed from 2.8% in July to 2.1% in August. Affordability is still a challenge compared to long-term averages.
Outlook for Borrowing Costs
Lower borrowing costs in the near future might help keep demand steady. Strong household finances and a stable job market are expected to support this trend. The unexpected drop in house prices this morning suggests a slowing economy, which could impact monetary policy. This strengthens our belief that the Bank of England is close to lowering borrowing costs after maintaining rates above 4% for most of the past year. We think this data increases the likelihood of a rate cut before the end of 2025. For traders focused on interest rates, this means positioning for cuts sooner than the market expects. We’re looking at opportunities in SONIA futures, particularly for the December 2025 and March 2026 contracts, which might be undervaluing the chance of an early move. This situation resembles the market shift we saw in late 2023 when weak economic data caused a quick change in rate expectations. This softness will likely affect UK housebuilder stocks, leading to expected weakness in companies like Persimmon and Taylor Wimpey. Buying short-term put options on a UK construction index could be a smart way to take advantage of this trend. The FTSE 250, which is more linked to the UK economy than the FTSE 100, may also underperform.Impact on Currency and Volatility
The chance of earlier rate cuts puts downward pressure on the British pound. With UK inflation stabilizing around 2.4% in recent months—down from the peak of 11.1% in 2022—the central bank has more flexibility to act. We expect GBP/USD to dip below its recent range and potentially hit the 1.2400 level in the coming weeks. This unexpected data could lead to some market volatility after a quiet summer. The implied volatility on options for UK-focused assets, especially the mid-cap index, may be undervalued. We see this as an opportunity to buy straddles to trade any increase in market uncertainty as autumn arrives. Create your live VT Markets account and start trading now.Few FX option expiries may interest traders today due to holidays in the US and Canada
On September 1, there are no major FX option expirations that are expected to significantly influence trading. Since both the US and Canada are observing a holiday, the trading session is likely to be quieter.
There will be some minor expirations for EUR/USD and GBP/USD, but they are not expected to have a significant impact on the market.
Understanding Expiry Impacts
For more information on how to use this data, you can find additional resources on relevant trading platforms. Today’s slow start to September is expected due to the North American markets being closed for the holiday. In this quiet trading environment, we shouldn’t make too much of any small price changes. The minor option expirations mentioned are insignificant and won’t affect price movements. The main focus now shifts to the US jobs report for August, scheduled for this Friday. We are interested in whether the labor market is slowing enough for the Federal Reserve to rethink its approach. After a solid but not extraordinary addition of 190,000 jobs in July 2025, a similar report could bring a rate hike back into discussion.Key Economic Indicators
This data is critical for shaping expectations before the Federal Reserve’s upcoming meeting later this month. Meanwhile, the European Central Bank (ECB), meeting next week, is facing a different challenge with slowing growth and inflation dipping to 2.2% in the latest report. The differing policies of the Fed and ECB continue to drive market trends. Implied volatility in major pairs like EUR/USD is noticeably low, hovering around multi-month lows of 6.5%. This indicates that options are relatively inexpensive, providing an opportunity to position for a potential price movement. An unexpected outcome in jobs data or from the central banks could lead to a quick increase in volatility. We view this as an opportunity to consider strategies that benefit from a stronger US dollar against a weaker euro. Given the low costs, purchasing simple puts on EUR/USD or creating put spreads could offer a defined-risk way to prepare for a potential decline. These strategies can help protect against downside risks ahead of the significant events that will shape the month. Create your live VT Markets account and start trading now.A quieter start to the week as US markets are closed, leaving Europe to deal with volatility.
The US and Canada are celebrating Labour Day, leading to a long weekend with closed markets, including Wall Street and the Treasuries market. This leaves European traders in charge, while US futures remain open with an uncertain outlook.
The dollar is slightly weaker, and gold is on the rise, aiming for the $3,500 target. Market players are also grappling with the effects of Trump’s tariffs, which continue to influence market conditions.
Economic Data Releases
Later, several economic reports will come out in Europe. These include the final manufacturing PMI for August, UK credit data, and the Eurozone unemployment rate. These releases are not likely to significantly sway the markets today. With US markets closed for Labour Day, we should be cautious of major movements in Europe. Low trading volume can lead to misleading price changes that might reverse once Wall Street reopens. Today is best spent observing the market rather than jumping into new positions. The ongoing uncertainty about tariffs is the key issue, leading to increased market volatility. The VIX, which measures market fear, has recently risen above 22, showing this anxiety. This suggests that buying options, like puts on broad market indices such as the S&P 500, could be a smart way to protect against potential downturns in the weeks ahead.Market Strategies Amid Uncertainty
We remember how specific sectors reacted during the trade disputes of the late 2010s. The new tariffs could produce clear winners and losers. Traders might consider put options on European car manufacturers and call options on their US counterparts. This strategy helps isolate the impact of the new trade policies. The dollar’s weakness and geopolitical tensions are supporting gold prices. With ongoing inflation concerns—like the July 2025 US CPI reading of 4.1%—the demand for gold as a hedge is increasing. Using call options on gold futures or gold-backed ETFs can directly capitalize on a move above the $3,500 mark. Even though upcoming European data like manufacturing PMIs are typically not major events, a nervous market can overreact to any news. Exploring option spreads such as bull call spreads or bear put spreads may be a wise strategy. This approach allows for directional bets while managing risk and reducing upfront costs in today’s volatile environment. Create your live VT Markets account and start trading now.Gold aims for a breakout driven by rising demand and uncertainty in US policies
Gold finished August with over 2% gains, bouncing off its 100-day moving average. Buyer interest has picked up since last year, and gold’s appeal is on the rise as a new week starts.
Gold has reached its highest point since late April, where it paused around $3,500. The current US tariffs situation makes gold an attractive safe asset during uncertain times.
Factors Affecting Dollar Appeal
US policy uncertainty and mixed messages have made the dollar less attractive this year. Concerns about the Federal Reserve’s independence and low confidence in the dollar also boost gold’s appeal. Central banks are buying gold, viewing it as a hedge against potential stagflation risks. The $3,500 mark from April is important to watch, as breaking through it could lead to even more gains. Gold’s movement has generally been sideways over the last three months. With a more than 2% gain last week and a solid bounce off the 100-day moving average, the upward momentum that began last year is continuing. After months of sideways movement, new buying is now challenging the highs from April 2025. This energy hints that a significant market move may be close. The continued uncertainty from US trade policy, especially recent tariff news over the weekend, is putting pressure on the dollar. The U.S. Dollar Index (DXY) has dropped below 95.00 for the first time since early 2025. This situation makes dollar-backed assets less appealing, directing investment toward safe havens like gold.Political and Economic Influences on Gold
Political pressure on the Federal Reserve adds to these worries, lowering confidence in US assets. President Trump’s recent comments questioning the Fed’s future rate decisions before the September FOMC meeting have only increased this uncertainty. For traders, this political risk signals a need to protect against potential dollar weakness. The overall economic environment is also favorable for gold. Data from the World Gold Council for Q2 2025 showed that central banks kept buying aggressively, adding another 250 tonnes to global reserves. This demand from institutions provides a strong support level for gold prices, especially with inflation holding at 4.1% and revised Q2 GDP growth at just 0.8%, fueling stagflation fears. In the derivatives market, open interest in call options with a $3,500 strike price for October 2025 is rising. This suggests that traders are preparing for a breakout above the key resistance level set in April. A clear move above this price could trigger a wave of new buying. A sustained break above $3,500 would confirm the end of a three-month period of sideways movement and may allow for a quick surge in price. Traders should keep a close eye on this level, as it signifies a key point for new long positions. Any breach could indicate that a new phase of the bull market is beginning. Create your live VT Markets account and start trading now.Nasdaq futures show bearish trends, pointing out key levels and market sentiment despite the Labor Day market closure.
Markets are starting September with a cautious attitude. This is shown by the decline in NVIDIA, Dell, Bitcoin, and Asian stocks. Even though the US stock market is closed for Labor Day, Nasdaq futures still reflect this negative sentiment.
Order flow analysis indicates that sellers are in control, pushing the cumulative delta into negative territory. Currently, Nasdaq futures have tested and held just above the 23,417 Value Area Low, which is a key point. The next move will depend on whether sellers drive prices down to 23,338 or if buyers can push past the resistance zone of 23,460 to 23,479.
Crypto Market Decline
Crypto markets also reflect this risk-off mood. Bitcoin futures are trading at 107,840, down 935 points, adding to the global market’s caution. Stocks for Nvidia and Dell have disappointed investors, with Nvidia falling 4.5% and Dell dropping over 9% after its earnings report. Asian markets are also feeling the impact of the tech selloff in the U.S., with semiconductor and hardware stocks dropping. This suggests that the weakness in Nasdaq futures is part of a larger global trend. The test of the 23,417 level indicates a bearish sentiment, with movements expected based on how the market reacts after Labor Day. With major tech companies like NVIDIA and Dell showing losses, alongside falling Bitcoin futures, the market is clearly indicating a risk-off sentiment as September begins. The VIX, which measures market fear, recently climbed from 20 to 21.5, highlighting increasing uncertainty among investors. This nervousness is seen in the Nasdaq futures market, which is already trading lower. Even with the cash market closed for Labor Day, sellers are still dominant in Nasdaq futures. Order flow data reveals a significant drop in cumulative delta, suggesting buyers are absent. This signals that large players are preparing for a downturn when trading resumes on Tuesday.Historical Patterns And Economic Concerns
This negative sentiment matches historical trends, as September has often been the weakest month for stocks since the 1950s. The recent August jobs report, which added 210,000 jobs—more than expected—raises concerns about a potentially more aggressive Federal Reserve. This backdrop makes the current weakness feel even more serious. For derivative traders, the key level to watch for Nasdaq futures is 23,417. A clear break below this could lead to our next target of 23,338, making put options or short futures attractive. Any rebound that fails to stay above the 23,460-23,479 range should be seen as a chance to enter new bearish positions. This weakness is not isolated; it is confirmed across various asset classes. Bitcoin has fallen below its 50-day moving average, which is a technically bearish sign, and Asian markets opened the week down. This widespread selling pressure indicates that recent movements are not just temporary dips, but a coordinated shift in global sentiment. Create your live VT Markets account and start trading now.Tariff controversy creates market uncertainty, with a possible Supreme Court appeal affecting future outcomes
The US Court of Appeals for the Federal Circuit ruled 7-4 that Trump’s tariffs are illegal. The court stated that using the International Emergency Economic Powers Act (IEEPA) against countries like Canada, Mexico, and China was incorrect. This ruling has caused uncertainty in the markets as the week begins.
Trump plans to appeal to the US Supreme Court, with the deadline set for October 14. It’s important to note that Trump appointed three of the nine justices, while six were appointed by Republican presidents.
The Supreme Court’s Critical Stance
The Supreme Court’s tough stance on presidential power, especially regarding actions without Congress, leaves the outcome uncertain. Until the Supreme Court makes its decision, the tariffs will stay in effect, but they may no longer be enforceable after October. The tariffs under discussion do not affect those on steel and aluminum, which will continue. If deemed illegal, these tariffs could significantly affect collected duties and ongoing trade talks. If the Supreme Court rules in Trump’s favor, it might raise concerns about unchecked presidential power. The situation remains tense with possible widespread economic effects. This court ruling puts us in a difficult position, creating uncertainty until the October 14 deadline for the Supreme Court appeal. This can be seen in the options market, where the VIX rose 8% last week, closing at 19.5. This suggests traders are beginning to seek protection against potential market swings.Market Strategies Amid Uncertainty
The market is now facing a significant event, which is good for volatility strategies but risky for straightforward bets. Buying straddles or strangles on major indices like the SPY could help profit from large moves in either direction. It’s about betting on the reaction size rather than the outcome itself. We remember how similar situations unfolded during the 2018-2019 trade tensions. Tariff announcements caused immediate gaps in equity futures, with markets jolting wildly on every headline. We can expect this pattern to repeat in the coming weeks. Keeping positions light and flexible is essential. Sectors that are sensitive to global trade, such as industrials and major retailers, will likely experience the most volatility. The industrial sector already underperformed the S&P 500 by 2% last month, according to August 2025 data, as tariff discussions intensified. Derivative traders should also monitor currency pairs like USD/CNY and USD/MXN for stress signs. If the Supreme Court appeal fails and the tariffs are canceled, we might see a quick relief rally in companies affected by them, such as major importers, auto manufacturers, and tech firms with complex supply chains. Call options on these companies could become popular as the deadline approaches. On the flip side, if the Supreme Court backs the administration, it could lead to more trade chaos. This would likely push investors to a risk-averse stance, strengthening the US dollar as a safe haven. In that case, put options on multinational companies and ETFs linked to emerging markets would gain attention. Create your live VT Markets account and start trading now.A U.S. court decision on Trump’s tariffs impacted Asian market performance, showing mixed reactions.
A U.S. Federal Appeals Court ruled that many of Trump’s tariffs are illegal. This decision could change trade strategies, though the case is likely to be appealed. In China, the August PMIs showed ongoing weakness. Manufacturing shrank for the fifth month, registering a score of 49.4, while non-manufacturing slightly improved, bringing the overall measure to 50.5. A private PMI also surprised analysts with a positive reading of 50.5.
Asian markets reacted differently: stocks in China and Hong Kong remained stable, but Japan’s Nikkei 225 fell over 2%. The USD/JPY exchange rate fluctuated between 146.90 and 147.35.
Regional Economic Indicators
Economic indicators varied across regions. Australia’s manufacturing PMI rose to its highest level since September 2022 at 53.0, but building permits dropped by 8.2% compared to the previous month. The Reserve Bank of Indonesia hinted at possible currency intervention due to the current market instability.
In New Zealand, building permits increased by 5.4% in July, reversing the previous month’s 6% decline. However, South Korean export growth slowed to 1.3% in August due to the impact of Trump’s tariffs.
Trading was quiet due to a U.S. and Canadian holiday on Monday, which limited U.S. futures trading. The European Union announced plans to send troops to Ukraine amid ongoing geopolitical tensions.
Market Uncertainty and Options Strategies
The recent U.S. court ruling on Trump’s tariffs creates uncertainty in global trade. As the ruling is appealed, expect heightened volatility in currency markets, particularly for the Chinese Yuan and other Asian currencies sensitive to trade issues. In this climate, strategies that benefit from price fluctuations, like straddles on currency ETFs, may be more attractive.
The Chinese economy presents mixed signals. Official August data showed manufacturing still contracting at 49.4, but a private S&P Global survey reported expansion at 50.5. The property sector is struggling, illustrated by an nearly 18% drop in sales in August, prompting caution toward Chinese stocks. This situation suggests it’s wise to buy protective put options on Hang Seng index futures to guard against a downturn.
Japan’s Nikkei index declined sharply by over 2%. The August manufacturing PMI remained in contraction at 49.7, indicating negative sentiment. The Nikkei has already fallen more than 5% from its July 2025 highs, pointing to the possibility of continued downward movement. Buying put options on Nikkei 225 futures could be a straightforward strategy to capitalize on this weakness.
Australia’s inflation appears to be cooling, and with building permits plunging by 8.2% in July, the economy seems to be slowing. This might reduce the chance of further interest rate hikes by the Reserve Bank of Australia, which usually weakens the currency. This trend suggests it’s time to consider purchasing put options on the AUD/USD pair, anticipating a decline in the coming weeks.
Broader market risks are also rising. Tesla has reduced prices in China due to tough competition, which may pressure the tech sector. Coupled with ongoing geopolitical tensions in Europe and the Red Sea, the overall market environment is becoming more fragile. To safeguard our portfolios, buying call options on the VIX index may serve as a hedge against sudden market shocks.
Create your live VT Markets account and start trading now.
New Zealand allows wealthy foreign investors to buy properties worth over NZ$5 million, boosting the economy
New Zealand will allow wealthy investor visa holders to buy or build homes worth at least NZ$5 million (US$2.94 million). Prime Minister Christopher Luxon announced this change.
In April, New Zealand eased its foreign investor visa rules. The minimum amount required for riskier investments dropped from NZ$15 million to NZ$5 million, and the English-language requirement was removed.
