Insights 
VT 
In September, China’s retail sales experienced a year-on-year growth of 3%, surpassing initial projections of 2.9%. This performance indicated a positive trend in China’s retail sector.
Simultaneously, in the financial markets, USD/CAD is trading near 1.4000, notwithstanding lower oil prices. Additionally, the Japanese Yen regained its position against a weaker US Dollar.
Gold And Currency Impact
Gold in Pakistan and India saw price increases, as did Australian Dollar, sustained by China’s economic expansion in the third quarter. The EUR/USD faced pressure, hovering near 1.1660, impacted by France’s credit rating downgrade.
In the cryptocurrency sphere, coins like Mantle, Zcash, and Bittensor have rebounded, nearly reversing previous losses. However, cryptocurrencies like BNB, Solana, and Cardano suffered over 10% losses, contributing to market liquidations surpassing $1 billion.
With a forward-looking perspective, FXStreet emphasises the need for meticulous research before making investment decisions due to inherent risks. The content provided serves as information only, highlighting the importance of personal diligence in investment choices.
With Chinese retail sales beating expectations by only a tenth of a percent, we should not treat this as a sign of strong recovery. We saw similar minor beats throughout 2023 and 2024 that failed to ignite a lasting rally in China-linked assets. Therefore, placing aggressive bullish bets on instruments like the Australian dollar or copper futures seems premature.
Market Uncertainty
The upcoming Trump-Xi meeting is injecting a heavy dose of uncertainty into the market, and we need to prepare for price swings. The VIX, a key measure of market fear, has already crept up to 18.5 in the past month, a level reminiscent of the trade tensions we navigated back in 2019. Buying VIX call options or puts on major indices like the S&P 500 offers a direct hedge against a negative surprise from the summit.
In Europe, the downgrade of France’s credit rating is weighing on the Euro, which is struggling to stay above the 1.1650 mark against the dollar. This economic strain suggests there is more downside potential for the currency. We should consider buying put options on Euro FX futures to profit from a potential slide toward the 1.1500 support level.
Gold is trading at a lofty $4,250, acting as a safe haven, but the rally appears stretched. A lot of the current geopolitical risk seems to be priced in, much like the run-up to its previous record highs in 2023. A collar strategy—buying a protective put while selling a covered call against a long gold futures position—could be a smart way to protect recent gains.
The massive billion-dollar liquidation in the crypto markets is a major red flag for overall risk appetite. Historically, such intense selling pressure in speculative assets, like we saw during the market turmoil of 2022, often precedes broader weakness in traditional equity markets. We see this as a clear signal to check our downside protection and reduce exposure to high-beta assets.
