The US goods trade balance fell to $-99.3B in December, from $-86.9B in the previous period.<\/p>\n
This means the goods trade deficit widened by $12.4B between the two periods.<\/p>\n
The widening goods trade deficit for December 2025, now at $-99.3 billion, points to clear weakness for the U.S. dollar. This larger outflow of dollars to pay for imports suggests we should anticipate further declines in the currency’s value. We are therefore considering short positions on the dollar, potentially through put options on the USD index or call options on the EUR\/USD pair.<\/p>\n
This trade data, which will negatively impact Q4 2025 GDP calculations, arrives alongside other worrying signs for the economy. The latest January 2026 retail sales figures from the Commerce Department also showed a surprising 0.8% decline, reinforcing the narrative of a cooling U.S. consumer. This leads us to look at protective puts on broad market indices like the S&P 500, anticipating weaker corporate earnings forecasts.<\/p>\n
Such signs of economic slowing make it increasingly difficult for the Federal Reserve to justify its current policy stance. The market is already reacting, with yields on the 10-year Treasury note falling to 3.75% this week as traders price in a higher probability of a rate cut by summer. Consequently, long positions in Treasury note futures seem attractive to capitalize on this shift in interest rate expectations.<\/p>\n
We saw a similar pattern develop in the second quarter of 2025, where a surprise jump in the trade deficit preceded a slowdown in manufacturing PMI numbers for two straight months. That period saw a spike in market volatility, suggesting it is now prudent to consider buying call options on the VIX. This provides a hedge against the rising economic uncertainty we expect in the weeks ahead.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" The US goods trade deficit widened to $99.3B in December, up $12.4B from November.<\/p>\n","protected":false},"author":62,"featured_media":16959,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42301","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42301","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=42301"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42301\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16959"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=42301"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=42301"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=42301"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}