Insights 
VT 
The UK M4 money supply saw an increase from 0.4% to 0.6% in September. This marks a change in the financial measure which reflects the supply of money within the economy.
The Bank of Canada is anticipated to reduce its benchmark interest rate by a quarter point to 2.25%. This follows a prior rate cut in September as it continues its easing cycle.
US Federal Reserve Rate Decision
The US Federal Reserve is likely to lower the policy rate after its meeting in October. The statements and comments from Fed Chair Powell are expected to be important, especially with limited economic data.
Solana partnered with Western Union, enhancing its standing in the global remittance market. The Bitwise Solana Staking ETF recorded $56 million in trading volume on its debut, indicating growth in institutional support.
With the UK’s M4 money supply increasing, we see a potential for higher inflation down the road. This rise to 0.6% comes as the latest official data showed September inflation was still at a stubborn 2.8%, well above the Bank of England’s target. We should anticipate more volatility in the British pound, making options that profit from sharp price swings, such as long straddles on GBP/USD, a strategy to consider.
The expected interest rate cuts from both the Bank of Canada and the US Federal Reserve signal a major policy shift across North America. This dovish stance is a reaction to recent data showing US inflation has cooled to 2.4% and job growth has moderated. This environment is typically bullish for equities but bearish for the respective currencies, prompting us to look at call options on stock indices like the S&P 500.
Market Trends and Opportunities
Looking back to the market pivot in late 2023, we saw how anticipation of central bank easing drove bond prices higher. With the Fed and BoC confirming this path, futures contracts on government bonds, particularly the US 2-year Treasury note, become a direct way to trade this trend. We expect their prices to climb as the reality of lower rates for longer sets in.
In the crypto markets, Solana’s partnership with Western Union is a significant step toward real-world use. The strong $56 million debut of the Bitwise Solana Staking ETF also shows that institutional money is becoming more comfortable with the asset. This fundamental support suggests a bullish bias for the asset in the coming weeks.
Given the news, implied volatility on Solana options has already surged by over 15% this week. While the developments are positive, we remember the network instability issues from the early 2020s, which means downside risk remains. Therefore, selling cash-secured puts could be a way to collect the high premium, or using call spreads to bet on a rise with a defined risk profile.
