In October, US durable goods orders fell by 2.2%, equating to a $6.8 billion decrease, resulting in a total of $307.4 billion. This decline followed a 0.7% rise in September and exceeded the anticipated decrease of 1.5%. <\/p>\n
Excluding the transportation sector, new orders rose by 0.2%. However, when excluding defence, new orders dropped by 1.5%. The downturn was primarily driven by transportation equipment, which decreased by $7.2 billion or 6.5%, totalling $103.9 billion.<\/p>\n
In response to these numbers, the US Dollar Index experienced a modest downturn in the American session. It was last reported at 97.95, marking a 0.3% reduction on the day.<\/p>\n
Looking back at the October durable goods report, we saw it as an early warning sign of a cooling economy. The 2.2% decline was notably worse than expected, and even with transportation stripped out, the underlying growth was minimal. This suggested businesses were becoming hesitant about big-ticket spending as we headed into the end of the year.<\/p>\n
This trend has been confirmed by more recent data points leading up to today, December 23, 2025. The November jobs report showed payroll growth slowing to 98,000, missing forecasts, while the latest Producer Price Index (PPI) registered a 0.1% month-over-month decline. These figures reinforce the view that economic momentum is fading faster than many had anticipated.<\/p>\n
In response, we have seen market volatility pick up considerably in the past few weeks. The CBOE Volatility Index, or VIX, has been trading consistently above 18, a sharp increase from the calmer levels below 14 that we saw in early November. This points to rising uncertainty and a greater demand for portfolio protection.<\/p>\n
This environment suggests considering defensive options strategies. Purchasing put options on broad market indices like the SPDR S&P 500 ETF (SPY) could provide a hedge against a potential market downturn in the first quarter of 2026. Given the rise in the VIX, options premiums are higher, but this reflects the increased perceived risk.<\/p>\n
The Federal Reserve’s tone has also shifted, with commentary from the December FOMC meeting acknowledging risks to economic growth. As a result, market-based probabilities, such as those from the CME FedWatch Tool, now show a 65% chance of a rate cut by the end of March 2026. This is a significant repricing from just two months ago when the market saw virtually no chance of a cut in that timeframe.<\/p>\n
This change in interest rate expectations makes derivatives tied to Treasury yields attractive. We could position for falling rates by looking at call options on long-duration bond ETFs like the iShares 20+ Year Treasury Bond ETF (TLT). A continued stream of weak economic data would likely accelerate this trend, benefiting such positions.<\/p>\n
The US Dollar is also a key focus, as it tends to weaken when the Fed is expected to cut rates. The Dollar Index (DXY) has already fallen from its October highs near 98 to around 96.50. Traders could express a bearish view on the dollar by buying put options on the Invesco DB US Dollar Index Bullish Fund (UUP) for the coming months.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" US durable goods orders fell 2.2% in October, driven by transportation equipment; dollar index declined slightly.<\/p>\n","protected":false},"author":62,"featured_media":16962,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-43484","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\/43484","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=43484"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/43484\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16962"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=43484"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=43484"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=43484"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}