Eurozone construction output showed a decline of 1.1% in November, contrasting with a previous increase of 0.9%. This downturn reflects challenges that the construction sector faced in the period.
In the financial markets, gold prices surged to over $4,700, driven by geopolitical tensions and concerns over trade wars. The pressures affecting the US Dollar also contributed to the gold price rally.
Bitcoin Experiences Decline
Bitcoin experienced a drop, trading below $91,000 due to rising geopolitical tensions over Greenland. This situation has prompted a shift towards safer assets, as reflected in the soaring gold prices.
President Trump has threatened new tariffs on several European countries, including the UK, France, and Germany, with a 10% tariff rate to be implemented from February 1. This announcement has stirred market reactions and raised concerns about a new Europe risk premium.
Pi Network saw a modest rebound with a 1% increase, although selling pressure remains strong. Despite this slight recovery, a notable withdrawal of over 4 million PI tokens from exchanges was observed recently.
The drop in Eurozone construction output to -1.1% for November 2025 confirms the underlying weakness we’ve been tracking in the European economy. This slowdown, combined with rising geopolitical tensions, suggests a defensive posture is necessary. We see this as a signal to consider short positions on European equity index futures.
Focus on Upcoming Tariffs
The primary focus for the coming weeks is the February 1st deadline for potential US tariffs on key European nations over the Greenland dispute. This is driving a significant risk-off sentiment and a flight to quality assets. We believe buying volatility through VSTOXX futures or call options on the index is a prudent way to position for an increase in market uncertainty.
Gold’s surge past $4,700 is a direct result of these trade fears and the weakening US dollar. Open interest in gold futures has climbed over 15% in the last month alone, showing strong conviction from institutional traders. We continue to favour long exposure through call options on gold to capture further upside while defining our risk.
The slide in EUR/CHF toward four-week lows highlights a classic safe-haven flow into the Swiss franc. Looking back at the European sovereign debt crisis in 2011, we saw similar patterns where the franc strengthened dramatically against the euro during times of regional stress. Therefore, we are using put options on EUR/CHF as a hedge against escalating trade tensions within the continent.
We are also watching the broad-based weakness in the US dollar, which has pushed EUR/USD above 1.1700. This “Sell America” trade is being fueled by expectations that the Federal Reserve may have to cut rates more aggressively than the ECB, a sentiment reflected in the widening negative spread between US and German 2-year bond yields. This supports maintaining long positions in currency pairs like NZD/USD, which is approaching multi-month highs.
