Insights 
VT 
India’s bank loans increased to 11.4% by September’s end, up from a prior 10.4%. This marks a change in loan growth within the country’s financial sector.
The foreign exchange market saw the USD/JPY rise due to a change in the US’s China policy. Similarly, EUR/GBP remained stable, influenced by factors like UK fiscal issues and French politics.
Gold Prices
Gold prices reduced from previous highs, settling near $4,200 per troy ounce. This decline correlates with a rebound in the US Dollar and increased US Treasury yields.
In cryptocurrency, Bitcoin’s value fell to below $105,000. Ethereum and Ripple also showed declines, with Ripple dipping below $2.22.
Financial markets face a busy week ahead with various financial data releases, including US CPI and PMI figures. These numbers might influence future interest rate decisions by central banks.
Cryptocurrency market liquidations surpassed $1 billion within 24 hours, with BNB, Solana, and Cardano experiencing declines of over 10%. This results in them facing the largest losses among top cryptocurrencies.
Financial Markets Outlook
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Given the broad strength in the US dollar, we should be cautious about being long on other major currencies. The dollar’s rally is being fueled by a general risk-off mood, and upcoming US CPI data will be critical in testing the market’s bets on future Fed rate cuts. This environment suggests considering put options on pairs like the EUR/USD and GBP/USD to hedge against further dollar gains.
The outlook for European currencies looks particularly weak, with the Pound falling towards 1.34 amid UK fiscal concerns and the Euro nearing 1.1650 as traders expect potential ECB rate cuts. Upcoming UK inflation figures and Eurozone PMI data are key events that could accelerate this slide. We see this as an opportunity to structure short positions through futures contracts, anticipating more dovish central bank policies in Europe compared to the US.
Gold’s pullback from its highs near $4,400 to the $4,200 level is a direct result of the stronger dollar and higher US yields. However, this is the ninth straight week of gains, showing a powerful underlying trend similar to the bull run we saw from 2018 to 2020. This dip could be a chance to buy longer-dated call options, positioning for the rally to resume once this dollar surge eases.
The cryptocurrency market is showing extreme fear, with over $1 billion in liquidations pushing Bitcoin below $105,000. Such intense sell-offs, much like the ones we witnessed back in the 2021-2022 cycle, often lead to heightened volatility that can be traded. We can use this volatility by buying puts to speculate on further downside or by selling cash-secured puts at lower strike prices to collect premium from the panic.
In contrast, the Indian economy shows signs of heating up, with bank loan growth accelerating to 11.4%. This continues the strong credit growth trend we’ve observed over the past few years, which should provide underlying support for the Indian Rupee. We should look for opportunities to go long the Rupee against weaker currencies like the Euro or Pound through currency futures.
