Insights 
VT 
Crude oil stocks in the United States increased by 3.524 million barrels, surpassing the forecast of 0.12 million for October 10. This increase suggests a greater supply than expected.
Gold prices have reached a record high, nearing $4,300 per troy ounce. Demand for gold remains strong due to worries about the prolonged US government shutdown, US-China trade tensions, and potential Federal Reserve rate cuts.
Euro And Us Dollar Movements
The EUR/USD has been on the rise for three consecutive days, approaching the 1.1700 mark. The decline in the US Dollar and risk-related market trends support its upward movement.
The GBP/USD pair has also continued to rebound, with a two-day recovery exceeding one percent. This recovery is attributed to UK data performing better than expected.
Ethereum experienced a 3% drop despite SharpLink’s $76.5 million direct offering. Coinglass data noted $160.4 million in futures liquidations over the past 24 hours, dominated by $98 million in long liquidations.
The S&P 500 encountered an “inside day” after a sharp 2.7% drop induced by tariffs and a subsequent 1.3% recovery. This pattern indicates indecision in the market.
Cryptocurrency Market Trends
Solana is targeting a level above $200 as the broader cryptocurrency market seeks recovery. The rise accompanies positive movements in Bitcoin and Ethereum, suggesting improved sentiment in the market.
Given the market’s indecisiveness, we see an opportunity in volatility itself rather than outright direction in equities. The S&P 500’s “inside day” pattern following a tariff-driven crash highlights extreme uncertainty, and the VIX has been trading consistently above 25 for two weeks, a level not seen since the banking turmoil back in 2023. Traders should consider strategies like straddles or strangles on major indices to profit from large price swings in either direction.
The ongoing US government shutdown, now entering its third week, is the primary driver of US Dollar weakness. We see this reflected in the Dollar Index (DXY), which has broken below the key 102.00 support level, putting pressure on pairs like USD/JPY. This environment favors short-dollar positions against currencies with central banks that are less inclined to cut rates, such as the Euro, which is now approaching the 1.1700 handle.
Gold’s surge past $4,350 is a clear flight to safety, directly linked to the shutdown and expectations of Federal Reserve rate cuts. This rally is supported by the sharp drop in the 10-year Treasury yield, which has fallen below 3.8% for the first time this year. We expect continued demand for gold derivatives, with call options remaining attractive as a hedge against further economic or political instability.
The surprise build in crude oil inventories is a bearish signal, suggesting weakening demand amid fears of a global slowdown. This aligns with recent data showing a 5% drop in Chinese oil imports for September, reinforcing concerns that the $1.2 trillion in global tariff costs are beginning to impact industrial activity. Selling crude oil futures or buying puts appears to be the logical response to this supply and demand imbalance.
Uncertainty from the Federal Reserve itself adds another layer of complexity, with officials admitting they don’t know the full effect of tariffs on inflation. Despite this, Fed funds futures are pricing in a 75% probability of a rate cut by December, a dramatic increase from just 30% a month ago. This disconnect between market pricing and Fed hesitance will likely fuel further volatility in interest rate-sensitive instruments.
