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CME Group and Flutter’s FanDuel team up to launch event contracts for financial market betting
FanDuel is teaming up with CME Group to launch affordable event contracts by late 2025. This will allow people to bet on financial metrics like the S&P 500 or oil prices for as little as $1. The project will be carried out through a new joint venture that acts as a non-clearing futures commission merchant.
These contracts will cover daily changes in prices for the S&P 500, oil, gold, and other economic indicators. Interest in event contracts surged after the 2024 U.S. presidential election, attracting more attention from everyday investors and the industry.
Nomura keeps a short position on the USD, expecting declines due to upcoming events.
Nomura expects the USD to weaken further if Powell hints at a sluggish labor market during the Jackson Hole event. Recent weaker data on NFP and CPI suggests that the Fed may reduce rates, with a 25 basis point cut in September as a likely scenario. The stronger July PPI is considered a temporary issue.
Market Positioning
Market positioning looks manageable, indicating the dollar could drop if Powell indicates a softer policy or if new data remains weak. Risks include stronger-than-expected August data, more foreign investments in US assets, or an increase in USD demand related to China. At Jackson Hole, if Powell mentions a weaker labor market, we could see further dollar decline. If not, markets may wait for September NFP and CPI data for direction. Right now, our position is short on the USD, while staying aware of potential risks from upcoming events and data that could change market sentiment soon. We firmly believe the dollar will weaken more as the Federal Reserve plans to cut rates. July’s jobs report, which showed only 155,000 new jobs, backs our view that the labor market is slowing. Core inflation has also dropped to a two-year low of 2.8%, making a September rate cut likely. In the coming weeks, purchasing put options on the US dollar index (DXY) with a September expiration provides a way to limit risk while positioning for a possible sharp drop after the Jackson Hole symposium. This method helps us profit from a potential decline while keeping our losses limited to the option premium, making it a safer choice than directly shorting futures given the short-term risks.Speculative Positioning
We see potential for this shift, as the Commitment of Traders reports indicate speculative positioning is not as crowded as it was for shorting the dollar in late 2023. That time offers a useful comparison for how quickly the currency can decline once the market senses a genuine Fed shift towards easing, suggesting that the current trend can extend if data continues to align. However, we must stay alert for risks that might boost the dollar. Strong manufacturing or services PMI reports in August or renewed concerns about China’s economy could prompt a flight to safety. Such scenarios would quickly invalidate bearish positions on the dollar, making stop-losses on futures positions vital. The key moment will be Fed Chair Powell’s speech at Jackson Hole. If he openly acknowledges the softening labor market, we expect the dollar to drop immediately. If he is non-committal, traders in derivatives should prepare for range-bound trading until we receive the next inflation and employment updates in early September. Create your live VT Markets account and start trading now.Japan’s flash manufacturing PMI increased to 49.9, while the services PMI decreased to 52.7, and the composite PMI rose to 51.9.
Japan’s flash manufacturing PMI has risen to 49.9, up from 48.9. This shows a small improvement in the manufacturing sector.
On the other hand, the flash services PMI has dipped slightly to 52.7, down from 53.5. The composite PMI, however, has increased to 51.9 from 51.5.
Economic Rebalancing
As of August 21, 2025, Japan’s economy shows signs of careful rebalancing. The rise in the manufacturing PMI to 49.9 is a positive sign, indicating the sector is stabilizing after a challenging period. Yet, the slight drop in the services PMI to 52.7 suggests that the domestic recovery may be losing momentum. This mixed report likely means the Bank of Japan will maintain its current course for now. After ending negative interest rates in early 2025, officials will want to see stronger, consistent growth before making any changes. The current data may allow them to be patient, lowering the chances of an immediate rate hike. For traders monitoring the yen, it seems the USD/JPY pair might stay within a range. There is less reason for significant yen weakness, especially since Japan’s core inflation has remained above 2% for over two years. Consider buying short-dated call options on the yen to prepare for any unexpectedly strong data soon.Equity and Currency Strategies
In the stock market, the strong composite PMI of 51.9 should support the Nikkei 225 index. The better outlook for manufacturing is good news for Japan’s major exporters. Selling out-of-the-money put options on the Nikkei could be a smart way to earn premium, as this report makes a sharp downturn less likely. The main point is that the data does not provide a strong directional signal, which may result in lower implied volatility. This environment favors strategies that benefit from time decay and stable prices. We recommend traders focus on range-trading strategies for both currency and index derivatives until a clearer economic trend appears. Create your live VT Markets account and start trading now.PBOC expected to set USD/CNY midpoint at 7.1748, according to Reuters estimate
The People’s Bank of China (PBOC) sets a daily midpoint for the yuan (RMB) as part of its managed floating exchange rate system. This system allows the yuan to fluctuate by +/- 2% around the midpoint. This method helps manage the yuan’s exchange rate against a group of currencies, focusing especially on the US dollar.
Midpoint Determination
Every morning, the PBOC sets this midpoint by looking at market conditions, supply and demand, economic data, and international currency market changes. This midpoint acts as a reference for trading during the day. The yuan can move within the 2% range around this midpoint. If there’s too much volatility or if the yuan’s value approaches the trading band limits, the PBOC might step in. This means buying or selling the currency to stabilize its value. This intervention allows for a more controlled and gradual change in the yuan’s market value, which aligns with China’s economic conditions and policy goals. The expected USD/CNY midpoint of 7.1748 suggests that the yuan may continue to depreciate slowly. This is likely in response to recent economic data indicating a slowdown. The central bank’s guidance implies that the yuan might move downward in the short term. Given the managed nature of the yuan, it may be wise to buy US dollar call options against it. The PBOC’s daily management within the 2% band generally prevents sharp, unexpected currency fluctuations, keeping implied volatility low. In 2023, even when the yuan dropped below 7.30, daily volatility remained low, benefiting those who anticipated the direction without overspending on protection.Hedging Strategies
This perspective is backed by the clear difference in policy between the cautious US Federal Reserve and the more lenient PBOC. Recent data from July 2025 showed Chinese exports fell by 3.5% year-over-year, and Q2 GDP growth was slightly below expectations at 4.2%. This pressure makes a weaker yuan a needed tool for supporting the domestic economy. For traders managing corporate exposures, it’s crucial to re-evaluate hedging strategies. If the trend of yuan weakness continues, the cost of hedging using forward contracts is likely to rise. Locking in forward rates now might be a smart move for those with upcoming payments in US dollars. Create your live VT Markets account and start trading now.Nordea predicts a potential rise in EURNOK and a decline in USDNOK, recommending specific trading strategies
Divergence in Central Bank Policy
Central bank policies are starting to diverge. Norges Bank is likely to lower its interest rate in September after Norway’s July inflation report showed a drop to 2.8%. Meanwhile, the Eurozone’s core inflation remains stubbornly above 3%. This difference could strengthen the euro against the Norwegian krone. For traders, this situation may be an opportunity to buy EUR/NOK call options with later expirations. A notable rise above the 12.00 level would signal a strong bullish trend. Historically, the krone tends to weaken in the last quarter of the year, a trend seen in 6 out of the last 10 years. The krone is also facing challenges from the oil market. OPEC+ has announced a supply increase of 500,000 barrels per day starting in October, which has led to softer crude prices compared to their summer highs. This puts pressure on the Norwegian currency, which is sensitive to oil prices. Regarding the dollar, medium-term weakness against the krone is expected due to fiscal issues in the U.S. The latest Congressional Budget Office report predicts the U.S. deficit will surpass $2.1 trillion this fiscal year. This situation will necessitate a large issuance of Treasury bonds at a time when foreign central banks have been selling off U.S. debt for the last three months.Capital Flow Dynamics
Given this outlook, a strategy of selling USD/NOK rallies using futures contracts or buying put options near the 10.20–10.30 resistance level could be effective. This tactic aims to benefit from the anticipated dollar weakness in the coming months. The case for a weaker dollar is supported by the significant amount of U.S. liabilities in government bonds, raising the risk of depreciation. Global capital flows are also influencing this dynamic. The higher U.S. tariffs implemented earlier in 2025 are expected to dampen domestic demand. In contrast, the eurozone has launched new green energy infrastructure funds this year, drawing considerable foreign investment. This shift may continue to divert funds away from the dollar. Create your live VT Markets account and start trading now.China calls for stronger collaboration and trade with Pakistan and Afghanistan to improve security efforts.
China, Pakistan, and Afghanistan are working together to strengthen their economic, security, and political ties. Their goal is to boost regional cooperation and stability. They plan to enhance development efforts and increase trade and investment.
The countries are focused on improving security discussions and working together on law enforcement. Strengthening communication at different levels and building mutual trust are key goals.
Strengthening Bilateral Relations
China is backing Pakistan and Afghanistan in improving their relationship and aligning their interests. This means increasing exchanges and building trust among the three nations. Recently, there have been new commitments for economic and security collaboration among China, Pakistan, and Afghanistan. This shows a long-term plan to stabilize a historically unstable region. For traders, this might reduce the perceived risk related to investments in these countries. In the short term, we should pay attention to changes in volatility in Pakistan-focused ETFs. Historically, implied volatility for funds like the Global X MSCI Pakistan ETF (PAK) was often above 30% during times of uncertainty in the early 2020s. If this cooperation continues, we may see lower volatility, making strategies like selling put options on these ETFs more appealing, even if they carry some risk. The focus on development and investment highlights commodities. Afghanistan has large, untapped mineral resources, especially lithium and copper, which are central to this deal. We might explore long-dated futures strategies that forecast an eventual increase in global supply, potentially lowering prices in the coming years.China’s Belt and Road Initiative
This agreement is a significant part of China’s broader Belt and Road Initiative (BRI). As reported in early 2025, freight volumes at essential BRI projects, such as Pakistan’s Gwadar Port, increased by 12% compared to the previous year. Traders should consider call options on Chinese construction and logistics companies that may gain contracts from upcoming infrastructure initiatives. From a currency viewpoint, more Chinese investment could support the Pakistani Rupee (PKR). The PKR began to stabilize against the U.S. dollar in the second quarter of 2025, following a tough 2024. Options on currency futures could help position for a less volatile or gradually strengthening rupee in the coming months. However, we must remain cautious since these are only commitments for now. The security situation in the region is still unstable, and similar projects have failed before. Therefore, maintaining some protective positions, like long puts on a broader emerging markets index, could be wise to guard against potential setbacks in these discussions. Create your live VT Markets account and start trading now.Australia’s PMIs show significant improvement, indicating positive trends in manufacturing and services, boosting sentiment.
The Australia Flash Manufacturing PMI rose to 52.9, up from 51.3. Manufacturing output increased to 53.9 from 52.3 in July.
The Flash Services PMI climbed to 55.1, rising from 53.8. This is the highest level in 40 months, with a significant boost in hiring for services—the fastest growth since April 2023.
Composite PMI Findings
The Composite PMI reached 54.9, up from 53.6, marking the highest level since April 2022. Strong new orders and exports, especially from the US, Europe, and the Asia-Pacific region, fueled this growth. Employment trends were mixed. Hiring in services increased, while manufacturing jobs dipped slightly, marking the first decline since February. Capacity gains helped stabilize outstanding work after three months of clearing backlogs. Inflation for input and output prices slowed down, though it continued to rise at a lower rate. Overall, sentiment improved, with manufacturers feeling more optimistic than they have since April 2022, expecting better conditions and growth ahead. Today’s unexpectedly strong economic data indicates that the Australian economy is performing better than we expected. The flash composite PMI’s rise, the highest since April 2022, shows growth in both services and manufacturing. This resilience contradicts our earlier belief that the economy was slowing down.RBA Market Implications
This report will likely prompt the Reserve Bank of Australia (RBA) to rethink its position. With the latest quarterly CPI data from July 2025 showing inflation stubbornly high at 4.0%, this new evidence of economic strength makes interest rate cuts unlikely in the near future. We should now expect the RBA to maintain a “higher for longer” approach, especially since the cash rate has remained at 4.35% for over a year. Given this context, there is a clear opportunity for bullish positions on the Australian dollar. A firm central bank, combined with robust export growth—especially from a strong US economy—should support the AUD. We should consider buying AUD/USD call options to take advantage of potential upward momentum in the upcoming weeks. For the equities market, this data signals positive prospects for corporate earnings, particularly in the services sector. The ASX 200 has been moving within a narrow range, and this could trigger a breakout. We are looking at index call options or bull call spreads on the XJO to benefit from a potential rally fueled by improved economic sentiment. On the other hand, we should brace for rising government bond yields. The likelihood of the RBA keeping rates steady, or even increasing them, will pressure bond prices downward. We should explore derivatives that benefit from higher yields, like buying puts on Australian 10-year Treasury bond futures. The report highlights strong new orders and the best export growth in six months, lending credibility to this outlook. This isn’t just a temporary sentiment boost; it’s based on real business activity, supported by steady iron ore prices above $110 per tonne. This strength mirrors the recovery phase we saw in 2022, suggesting that the slowdown in 2024 was likely a brief pause rather than a new trend. Create your live VT Markets account and start trading now.New Zealand’s imports rise to 7.28 billion, while exports reach 6.71 billion.
In July 2025, New Zealand’s imports increased to 7.28 billion NZD, up from 6.5 billion NZD. Exports also saw a rise, reaching 6.71 billion NZD from 6.6 billion NZD in the previous period.
Trade Balance Overview
The trade balance now shows a deficit of 578 million NZD, compared to a surplus of 142 million NZD from before. This change marks a significant shift, with New Zealand spending much more on imports than it earns from exports. This situation suggests a weaker outlook for the New Zealand dollar (NZD). To take advantage of a declining NZD in the coming weeks, we might consider strategies like buying put options on the NZD/USD currency pair or selling NZD futures contracts. The data indicate that the surge in imports far exceeds the slight rise in exports, often leading to currency depreciation. The drop in exports is not surprising. July 2025 data showed that China’s manufacturing PMI fell to 49.8, indicating a slight contraction. Since China is a major market for our goods, their slowdown has a direct effect on our export income. However, a weaker NZD would eventually make our exports cheaper and more appealing. Strong import numbers suggest high domestic demand, which could push inflation higher. The latest CPI data from Statistics NZ in July 2025 shows inflation holding steady at 4.2%, well above the Reserve Bank of New Zealand’s (RBNZ) target. This places the RBNZ in a challenging position.Interest Rate Considerations
We should keep an eye on interest rate movements. The strong domestic economy may compel the RBNZ to consider raising rates to combat inflation, despite the negative trade balance. We can use options on interest rate swaps to prepare for potential volatility ahead of the next RBNZ meeting. Historically, we saw a similar pattern during the 2021-2022 period, when a post-pandemic surge in domestic demand significantly widened the trade deficit, leading to prolonged weakness in the Kiwi dollar. This current trend may have similar momentum that lasts longer than just a few weeks. Create your live VT Markets account and start trading now.Today’s economic calendar features diverse trade and PMI data from various regions.
Today’s economic calendar is full of important data, especially the Flash PMI for Australia, Japan, the EU, the UK, and the US. During the Asia-Pacific session, look for New Zealand’s trade data along with the PMI for Australia and Japan. Recent discussions from the RBA and possible rate hikes from the BoJ make this PMI data even more interesting.
EU Session Focus
In the EU session, we’ll see Flash PMI data from Germany and France, followed closely by data from the UK. It’s important to watch for differences between the EU and UK data, as this could lead to short-term ups and downs in currency pairs like EURGBP. The US session will kick off with the latest jobless claims data, followed by the Philly Fed business index. Next, everyone’s attention will be on the Flash PMI data for the US. Ahead of the Jackson Hole event, the markets may be cautious about reacting to US data. However, after recent changes to non-farm payroll numbers, any big jump in jobless claims over 240,000 will be closely examined for its potential impact. We are closely monitoring today’s US data, but the main spotlight is on the upcoming Jackson Hole symposium. After last month’s non-farm payrolls were revised down from 210,000 to 165,000, if today’s weekly jobless claims rise above 240,000, it might indicate a weakening labor market. This uncertainty makes options for increased volatility, like VIX futures, look more attractive. The flash US PMI data is also crucial, especially since the latest CPI reading is a stubborn 3.4%, slightly above expectations. We’ll watch to see if the services sector, which has been above 54.0 for the past quarter, starts to cool down. A strong services reading could push markets to anticipate a more aggressive stance from the Fed, which may affect short-term interest rates.Global Economic Divergence
Across the Atlantic, we are looking for signs of a growing divergence between the UK and Eurozone economies. With UK inflation at 2.8% compared to the Eurozone’s 2.2%, a weak German manufacturing PMI might spark bets that the ECB will pause its rate hikes before the Bank of England does. This divergence could create opportunities in EUR/GBP options, especially strategies that benefit if the pair goes lower. In Asia, Japan’s flash PMI is key for yen traders. There’s strong speculation that the Bank of Japan may finally shift away from its ultra-loose policy, particularly after USD/JPY tested the 155 level last summer. A strong PMI reading could cause a sharp reaction in yen futures as markets start to think there’s a chance of a policy change. Australia’s PMI will also be monitored to determine if the RBA needs to consider another rate hike to tackle domestic inflation. Given the current global uncertainty, we expect major market reactions to today’s data might be brief, as many traders will wait for clarity from central bankers next week. This suggests that using options to manage risk could be a better approach than making large, directional bets right now. Create your live VT Markets account and start trading now.Alibaba proposes a spin-off and separate listing for Banma Network Technology on HKEX.
Alibaba plans to list Banma Network Technology separately on the Hong Kong Stock Exchange (HKEX). The company will keep more than 30% ownership of Banma, though final details about the spin-off are still being worked out.
Banma intends to list its shares on the main board of the HKEX. Alibaba has confirmed that it will maintain a significant stake to stay actively involved in Banma’s operations.
The spin-off of Banma Network Technology creates some short-term uncertainty about Alibaba’s value, which we see as a clear chance to capitalize on. We have already noticed the implied volatility on BABA’s front-month options rose by four percentage points to 42% since the announcement. This makes selling options, like covered calls or cash-secured puts, more appealing for those who expect the stock to stay stable in the upcoming weeks.
We now need to recalculate Alibaba’s sum-of-the-parts valuation, which will likely cause some price fluctuations. With China’s connected vehicle market projected to grow by about 18% in the first half of 2025, a successful IPO for Banma could unlock substantial value. Traders might consider long-dated bull call spreads to take advantage of this possible positive shift while managing their risk.
Looking back at the market’s response to the Cainiao and Freshippo IPO talks in 2023 and 2024 offers helpful insights. Initially, the market reacted positively, but it often drifted as it awaited clear financial details. This pattern suggests that any initial price spike in BABA shares might not hold, making it wise to wait for more information before making strong predictions.
Additionally, the health of the Hong Kong IPO market is crucial to watch. As of July 2025, fundraising on the exchange has increased by 25% year-over-year, but interest in new tech listings remains weak. Therefore, the performance of other recent tech IPOs on the Hang Seng will be a key indicator of how Banma will be received.
