Insights 
VT 
Ireland’s Consumer Price Index decreased to -0.2% in September from 0.4% the previous month. This indicates a downturn in consumer prices over the given period.
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Market Currency Updates
In related updates, the Euro has reduced losses against the Swiss Franc due to the ECB’s steady monetary policy. GBP/JPY has seen a decline after a four-day rally as the markets reassess the Bank of Japan’s policy.
Gold remains steadfast near high levels, supported by predictions of potential FED rate cuts and a prolonged US shutdown. The Euro has softened due to weaker German trade data.
The CAD has remained stable before a speech from BOC SDG Rogers. Meanwhile, the EUR/USD stays low with attention on the FED’s decisions.
In the cryptocurrency market, Bitcoin saw a decline to nearly $121,000 amid profit-taking and risk-off sentiment. Ethereum and Ripple experienced reductions, reversing gains from their prior recovery.
Eurozone Economic Concerns
The drop in Irish consumer prices to -0.2% is a concerning signal for the entire Eurozone, especially with the European Central Bank reaffirming a steady stance. We see this as a precursor to wider deflationary pressures, similar to the low-growth environment we experienced in the mid-2010s. This divergence between weakening data and a passive central bank points to further downside for the Euro.
We are looking at buying EUR/USD put options with strikes around 1.1450 expiring in November. The break of the 1.1600 level is technically significant, and historically, such breaks have led to sustained follow-through selling. This strategy offers a defined-risk way to position for a slide towards the 1.1300 area.
The ongoing US government shutdown is fueling a flight to safety, making the US Dollar the primary beneficiary despite expectations of Fed rate cuts. This situation is reminiscent of past risk-off events, where the dollar’s reserve status outweighs domestic policy concerns in the short term. A Congressional Budget Office report on the 2019 shutdown estimated it cost the economy $11 billion, underscoring the serious economic drag that is pushing investors into havens.
With Gold holding steady near $4,000 an ounce, the metal is benefiting from both the shutdown uncertainty and bets on a looser Fed policy. We have seen consistent central bank gold purchases over the past few years, with the World Gold Council reporting net purchases of over 800 tonnes in 2023, providing a strong underlying bid. We believe call options on Gold futures are attractive to capitalize on further upside while limiting risk if sentiment reverses.
