In the European morning session on 11 August 2025, markets were largely quiet, with investors cautious ahead of the US CPI report, the week’s main event. Key statistics include Italy’s July final HICP at 1.7%, unchanged from preliminary results, and SNB total sight deposits at CHF 465.9 billion. The BofA survey noted trade war concerns as the biggest risk at 29%, followed by inflation at 27%.
The dollar remained steady, despite being more vulnerable after last week’s declines. Major currencies showed limited movement, with EUR/USD down 0.1% to 1.1625 and GBP/USD down 0.2% to 1.3425. USD/JPY increased by 0.1% to 147.88, while USD/CAD rose by 0.2% to 1.3780. In equities, European indices and US futures remained largely unchanged, awaiting US inflation numbers.
Cryptocurrencies And Commodities
Cryptocurrencies like Bitcoin and Ethereum started strong after gains over the weekend. Bitcoin rose 0.9% to $120,382, and Ethereum reached $4,300, though these gains have moderated. Gold fell 1.3% to $3,352.64 as traders anticipated US tariff clarifications. Meanwhile, WTI crude increased by 0.5% to $64.19.
We are in a holding pattern ahead of the US inflation report tomorrow. After last month’s Core CPI in July 2025 came in at a stubborn 3.8%, this report could dictate market direction for the rest of the quarter. Derivative traders should be prepared for a spike in volatility following the release.
There is a notable warning about potential downside for equities over the next three months. This suggests that buying protective puts on the S&P 500 could be a prudent strategy to hedge against a near-term drop. We saw a similar setup back in the spring of 2024, when inflation fears led to a brief market pullback before a strong recovery.
The volatility index, or VIX, is currently sitting near 18, which is not showing extreme fear just yet. This indicates options are not overly expensive for traders looking to make a directional bet on the CPI data. A straddle, which involves buying both a call and a put option, could be used to profit from a large price swing in either direction.
Gold and Currency Market
Gold is pulling back from its highs as we await clarity on US tariffs and the direction of the dollar. This price consolidation is similar to what we saw in late 2024 before the precious metal broke above the $3,000 level. Traders could use options to play this range or position for the next major move depending on the inflation data.
In the currency market, the US dollar is at a key pivot point after falling last week. A cooler-than-expected inflation number tomorrow would likely push the dollar lower, benefiting pairs like EUR/USD. Options on currency ETFs can be a straightforward way to position for this potential outcome.
The summer of crypto continues with Bitcoin trading above $120,000, showing strong momentum. Given the high volatility, using options to define risk might be smarter than trading futures with high leverage. This allows for participation in the upside while capping potential losses if the trend suddenly reverses.
