Insights 
VT 
China’s industrial production increased by 6.5% year-on-year in September, surpassing anticipated figures of 5%. This growth denotes a robust expansion within the country’s industrial sector.
In other financial developments, the AUD/JPY strengthened beyond 98.00 as political movements in Japan hinted at the possibility of the first female prime minister. Meanwhile, concerns over OPEC+ oversupply led WTI to maintain losses near $57.00.
Cryptocurrency Weekend Rebound
On the cryptocurrency front, Mantle, Zcash, and Bittensor experienced a weekend rebound, almost recovering from Friday’s downturn. In contrast, BNB, Solana, and Cardano suffered significant losses over the same timeframe as total market liquidation surpassed $1 billion.
Forex market activity saw GBP/USD maintaining solidity above the 1.3400 level due to a softer USD, despite dovish expectations from the Bank of England. At the same time, EUR/USD remained subdued following a downgrade of France’s credit rating by S&P Global Ratings.
The gold market saw prices edge lower to about $4,245, as demand lessened post-festive season. Looking ahead, the financial world anticipates the Trump–Xi meeting at the APEC summit, expected to touch upon existing tensions without making immediate resolutions.
Given China’s industrial production surprisingly jumped to 6.5% last month, we should anticipate continued strength in the Australian dollar. This data suggests robust demand for raw materials, directly benefiting Australian exports. We’ve already seen September iron ore shipments to China rise 8% month-over-month, so positioning for further upside through AUD call options or futures seems prudent.
Shorting Opportunities in Japan
In Japan, the situation is creating a clear opportunity to short the yen. The Bank of Japan is signaling a move away from its ultra-loose policy just as a new government coalition raises concerns about fiscal discipline. This divergence is likely to pressure the currency, a dynamic we haven’t seen sustained since before the country’s multi-decade fight with deflation.
The downgrade of France’s credit rating by S&P is a significant headwind for the Euro. The spread between French and German 10-year bond yields has already widened to 75 basis points, its highest since the 2022 energy crisis, indicating rising sovereign risk. We should consider buying puts on the EUR/USD, as this development points to deeper structural issues within the Eurozone.
Crude oil’s weakness, with WTI holding near $57, presents a bearish signal despite China’s strong manufacturing numbers. The market seems more focused on OPEC+ oversupply, with recent reports suggesting compliance with production cuts has fallen to its lowest level this year. This environment supports strategies that profit from either falling prices or heightened volatility in energy markets.
With the upcoming Trump-Xi meeting at APEC being framed as a tense negotiation, buying volatility is the most logical hedge. The CBOE Volatility Index (VIX) is currently trading near a yearly low of 14, making call options relatively cheap protection against a negative outcome. We remember how the 2018-2019 trade war caused sharp market swings, and this summit carries similar risks.
