Insights 
VT 
The United States RealClearMarkets/TIPP Economic Optimism index recorded 48.3 in October, underperforming the expected 49.3. This data suggests weakening economic sentiment.
Gold prices approach the $4,000 mark as fears about a US government shutdown and interest rate cuts persist. Political uncertainties in France and Japan’s potential pro-stimulus policies are additional factors stabilising gold’s upward trend.
Cryptocurrency Developments
Bitcoin maintains a position around $124,000, below its recent record high of $126,199. Ethereum shows potential for a new rally driven by increasing institutional interest, and Ripple’s XRP is poised for growth, aiming at $3.40.
Sanae Takaichi’s leadership in Japan is predicted to maintain the country’s current fiscal and monetary strategy. This leadership change brings market opportunities and risks.
The Dow Jones has seen a decrease due to worries around a possible shutdown. The Reserve Bank of New Zealand is gearing up to lower interest rates by 25 basis points in October.
FXStreet advises caution in using market information and highlights the risk associated with market investments. It encourages thorough research as it does not make specific stock recommendations.
Market Volatility Observations
With US economic optimism falling to 48.3, below the neutral 50-mark, we see a clear signal of rising fear in the market. The CBOE Volatility Index (VIX) has reflected this, jumping over 35% in the last two weeks to a high of 28.5, a level not seen since the second quarter of 2025. Traders should consider buying call options on the VIX or related volatility ETFs to hedge against or profit from further market turbulence.
The increasing risk of a US government shutdown is putting pressure on equities, with the Dow Jones easing lower. We saw a similar situation back during the prolonged shutdown in late 2018 and early 2019, which contributed to a significant market correction before a recovery. Buying put options on major indices like the SPDR S&P 500 ETF (SPY) offers a direct way to protect portfolios from a potential repeat of that downside.
Gold’s rally toward $4,000 per ounce signals a major flight to safety, a trend that is unlikely to reverse in the immediate future. Data for September 2025 showed a net inflow of over $12 billion into gold-backed ETFs, confirming strong institutional demand. We believe using call options on gold futures (GC) is the most effective way to maintain upside exposure to this powerful momentum.
With the FOMC minutes on deck, attention is squarely on the Federal Reserve’s next move. The CME FedWatch Tool is now pricing in an 85% probability of a 25-basis-point rate cut at the November 2025 meeting, up from just 50% a month ago. To position for this, traders can go long on 2-Year Treasury Note futures (ZT), which are highly sensitive to shifts in near-term interest rate policy.
Even with domestic troubles, the US dollar is strengthening as global investors seek refuge, putting pressure on risk-sensitive currencies. The Australian Dollar, for instance, is holding just above key support, but speculative net-short positions against it are at their highest level in six months. This environment supports using derivatives to short pairs like the AUD/USD, anticipating a break lower if risk aversion intensifies.
