In October, Canada’s wholesale sales increased by 0.1%, surpassing expectations of a -0.1% contraction. This deviation from forecasts reflects a more resilient market performance than anticipated.
The EUR/USD remained near 1.1740 as Federal Reserve officials suggested a potential pause in easing. Meanwhile, GBP/USD fell to near 1.3360 due to disappointing UK economic data in recent months.
Commodities And Currency Movements
Record highs were observed in commodity prices, with copper nearing $12,000 and silver reaching $64.3, according to Commerzbank. The Japanese Yen softened ahead of a policy decision by the Bank of Japan.
Gold’s value challenged the notable level of $4,300 per troy ounce, driven by expectations of further rate cuts from the Federal Reserve. The S&P 500 continued its upward trend amid fluctuating US Treasury yields following a recent rate cut by the Federal Reserve.
Litecoin steadied above $80, though bullish positions appear at risk due to a potential long squeeze. Aave approached $204, with signs of a strengthening bullish trend, hinting at a possible breakout.
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Upcoming Monetary Policies
The Federal Reserve’s recent rate cut is the main event, and we see the market pricing in at least two more cuts by mid-2026. Despite core inflation still running just above 3%, a stubborn level we also saw back in late 2023, the path of least resistance appears to be lower for interest rates. This makes buying call options on SOFR futures an attractive way to position for this expected easing cycle in the coming weeks.
This dovish Fed pivot is clearly fueling the fire in commodities, with gold pushing past $4,300 and copper near $12,000. We believe this is not just about cheaper money, but also ongoing supply disruptions from major South American producers that have worsened since 2024. Traders should consider buying call spreads on copper and silver futures to ride this powerful momentum with defined risk.
In equities, the S&P 500 rally looks set to continue into the year-end, especially in the non-tech sectors benefiting from the lower rate environment. Volatility has been surprisingly low, with the VIX trading well below its historical average of 19, making options relatively cheap. We think buying calls on industrial or financial sector ETFs could outperform the broader index.
The British Pound is our primary focus in the currency markets ahead of the Bank of England meeting on December 18. The second straight month of contracting GDP, a situation not seen since the struggles of 2023, puts immense pressure on the BoE to adopt a more dovish stance. Buying puts on GBP/USD seems like a prudent hedge against a dovish surprise from the central bank.
