Insights 
VT 
The UK’s Rightmove House Price Index experienced an increase to 0.1% in October, compared to a previous figure of -0.1%. This change indicates a slight positive movement in the housing market for the month.
In global financial news, the total cryptocurrency market experienced substantial liquidations over a 24-hour period, surpassing $1 billion. Major cryptocurrencies like BNB, Solana, and Cardano saw declines exceeding 10%.
Currency and Commodity Trends
The EUR/USD fell towards daily lows around the 1.1650 mark amid the strengthening of the US Dollar. Similarly, GBP/USD faced pressure as it neared the 1.3400 level due to renewed geopolitical stresses and concerns over US-China trade.
Gold prices have moved lower, trading around $4,245 as post-festive demand decreased, ending a recent rally. In upcoming economic data, US CPI and PMI figures are set to be released, with implications for Federal Reserve decisions, along with UK inflation statistics potentially affecting Bank of England actions.
Asia’s market outlook this week remains buoyant despite recent economic disturbances, maintaining some optimism. The week’s developments emphasise upcoming market factors, including various international CPI releases and PMI data, which may sway central bank policies.
The slight uptick in the UK housing market, with the Rightmove index turning positive year-over-year, marks a noteworthy shift from previous declines. Given that UK inflation has remained persistent, with the September 2025 reading at 3.1%, the Bank of England may be forced to delay any planned rate cuts. This situation suggests traders could position for volatility in the British pound using straddles or strangles on GBP/USD ahead of the next inflation report.
US Dollar and Market Sentiments
We see the US dollar’s strength as a direct result of broader risk aversion, with the Dollar Index (DXY) holding firm above 106.5. This move is fueled by S&P’s downgrade of France’s sovereign credit and persistent geopolitical tensions in the Middle East. Consequently, call options on the dollar and on oil futures, with WTI crude trading near $95 a barrel, seem like a sensible strategy to hedge against further instability.
Gold’s pullback below $4,250 appears to be a consolidation phase after its recent festive-driven rally. Historically, gold performs well during periods of high government debt and global uncertainty, similar to the conditions we saw back in the European debt crisis of 2011. We view this dip as a chance to enter long positions through call options, anticipating a rebound if upcoming US CPI data points to stubborn inflation.
There is a significant divergence between the resilient sentiment in equity markets and the clear warning signs coming from macroeconomic data. The CBOE Volatility Index (VIX) has climbed to 22, signaling that options traders are pricing in higher risk than the stock market currently reflects. The recent billion-dollar liquidation in the crypto market further indicates that speculative appetite is waning, making protective put options on major indices an increasingly prudent move.
