Insights 
VT 
In India, bank loan growth increased to 10.4% on September 15, compared to the previous rate of 10.3%. This slight rise indicates a steady credit growth in the country’s banking sector.
Elsewhere, gold remains under pressure, trading below $4,000, influenced by factors such as Fed rate cut bets and geopolitical risks. WTI Crude Oil decreases to below $60 following eased geopolitical tensions due to a Gaza peace deal.
US Markets Bounce Back
US indices experienced an upward trend as the momentum in artificial intelligence counterbalanced concerns about a government shutdown. The USD/CAD rate dropped below 1.4000, bolstered by strong Canadian job data.
In currency markets, the GBP struggles against the US Dollar despite comments from the Bank of England. Euro/USD stays near weekly lows following US consumer sentiment data, trading around 1.1560.
Bitcoin maintains a support range between $120,000 and $121,000, while Ethereum and Ripple approach critical levels. Litecoin shows positive movement, trading around $130, defying general bearishness in the crypto market.
US tariffs continue to play a key role in foreign policy and public finance, with the government reaffirming their use recently. Retail interest in Litecoin has surged, contributing to its recent price increase.
Impact Of Global Economics
We are seeing a tense standoff in the US markets, where strong momentum in artificial intelligence is keeping indices afloat despite the uncertainty of a government shutdown. This kind of divergence often increases volatility, making options strategies that bet on market swings, such as VIX call options, particularly attractive. We’ve seen in past shutdowns, like the one in 2018-2019, that while the market can be resilient, sector-specific risk rises.
The US Dollar is showing signs of weakness, pressured by expectations of Federal Reserve rate cuts and dismal consumer sentiment figures. With the University of Michigan index at a low of 55, a level historically associated with recessions, traders should consider positioning for further dollar downside. Using options on the Invesco DB US Dollar Index Bullish Fund (UUP) could be a way to express this view with defined risk.
Gold’s recent pause below $4,000 an ounce appears to be a consolidation phase before a potential next move higher. Given the likelihood of a more dovish Fed, buying long-dated call options on gold futures or ETFs like GLD offers a way to participate in renewed upward momentum. This strategy allows for significant upside exposure while capping the initial investment cost.
The peace deal in Gaza has taken the geopolitical risk premium out of the oil market, pushing WTI crude below $60 a barrel. This is a significant shift that benefits energy-consuming sectors like transportation and manufacturing. We should consider buying put options on crude oil futures to speculate on further price drops as global supply fears recede.
Outside of the US, India is showing impressive economic resilience, with bank loan growth accelerating to 10.4%. This indicator has been a reliable sign of domestic economic strength, with similar growth rates preceding the market rallies we saw in the early 2020s. To gain exposure, using call options on the NIFTY 50 index would be a direct way to invest in this positive trend.
In foreign exchange, the contrast between a strong Canadian labor market and a struggling British pound presents a clear opportunity. The Canadian dollar is strengthening, while Sterling is hampered by cautious Bank of England commentary. A pairs trade, perhaps by buying call options on the Canadian dollar while simultaneously buying puts on the British pound, could capitalize on this divergence.
