On 8 August 2025, the Nasdaq index achieved a new record high and intraday peak. The S&P index approached its all-time high, marking a strong week, with the Nasdaq advancing by 3.87% and the S&P gaining 2.43%.
In currency markets, the US dollar generally strengthened, with a slight decline against the British pound, the week’s strongest currency. The euro increased by 0.21%, while the Japanese yen rose by 0.46% against the dollar.
Federal Reserve Commentary
Fed’s Musalem expressed concerns regarding tariffs’ effect on inflation, while other Fed members were less hawkish after the US jobs report. Canada reported a decline of 40.8K jobs contrary to expectations of a 13.5K increase, impacting the USDCAD exchange rate.
The British pound surged following a close 5-4 vote at the BOE to lower rates by 25 basis points. The US dollar was robust against the Australian dollar and the Swiss franc, with the latter affected by increased tariffs to 39%.
US yields increased today, with notable rises across all tenures. For the week, yields also ascended, following the previous week’s sharp drop after disappointing US jobs data. The trading week for the dollar was mixed, varying against major global currencies.
The upcoming summit between Trump and Putin is the biggest event on the horizon. This introduces major uncertainty, which could cause sharp moves in either direction for markets. We believe using options strategies like straddles on the S&P 500, which profit from large price swings regardless of direction, is a prudent approach.
Market Outlook
With the Nasdaq hitting new records, complacency might be setting in. The CBOE Volatility Index (VIX) is currently trading near 15, a level that has historically preceded market pullbacks. This suggests that buying protective puts on the QQQ ETF could be a cheap way to insure portfolios against a potential correction in the coming weeks.
Rising US bond yields reflect a more hawkish tone from the Federal Reserve. Uncertainty over the next Fed Chair will only add to interest rate volatility. We recall the sharp market repricing during the Fed’s pivot back in 2022, and see value in options on SOFR futures to speculate on future policy shifts.
The pound has been the strongest currency, but we question if this momentum can last. The Bank of England’s “hawkish cut” has been priced in, and positioning is likely crowded. We are looking at buying GBP/USD puts with a medium-term expiry to position for a reversal.
Canada’s terrible jobs report, with a loss of over 40,000 jobs, puts pressure on the Canadian dollar. This report confirms a slowing trend we have seen over the past two quarters, with the labor participation rate falling to 65.1%. We see potential for more upside in USD/CAD and will look to buy call options if the pair breaks decisively above the 1.3760 resistance level.
