Insights 
VT 
In August, the United States Housing Price Index recorded a monthly increase of 0.4%. This was higher than the expected 0.1% growth.
Markets are showing varied performances with different assets. The USD/JPY showed a decline as the Yen grew stronger due to US-Japan trade advancements.
Gold Prices
Gold prices seem stable below the significant $4,000 mark. This stability is supported by easing US-China trade tensions and a weaker US Dollar.
Within the cryptocurrency market, Bitcoin is attempting to continue its uptrend. It has risen above $114,000, supported by renewed interest in ETF inflows.
A trade truce between the US and China has buoyed global markets. This comes after a framework agreement, awaiting formal approval by leaders from both nations.
In the broader financial sector, interest is directed at broker performance in 2025. Various reports cover brokers across different regions and aspects, such as regulation and trading platforms.
Federal Reserve and Market Impacts
The August housing price index came in much hotter than expected at 0.4%, which complicates the path for the Federal Reserve. This strong data challenges the market’s widespread belief that the Fed will deliver a significant rate cut this week. After the sticky September CPI report showed core inflation still hovering at 3.9%, this housing strength gives policymakers a reason to remain patient.
We see this creating an opportunity in interest rate derivatives, as the market may be mispricing the Fed’s next move. Options on Fed funds futures could be attractive, particularly those that profit if the Fed signals a more hawkish stance than is currently priced in. A less dovish Fed would likely cause a short-term spike in the dollar, catching many traders off guard.
Against this backdrop, the British Pound looks particularly vulnerable as it struggles below the 1.33 level. With the UK’s latest budget revealing a larger-than-expected deficit and Q3 GDP growth revised down to just 0.1%, the Bank of England is under immense pressure to ease policy. We are looking at put options on GBP/USD to capitalize on this clear divergence between central banks.
Gold’s recent stability near $3,950 could be a trap for bulls anticipating rate cuts. If the Fed holds firm and US Treasury yields climb, gold could quickly retest lower support levels we haven’t seen since the summer. Remember how gold sold off sharply in late 2023 when the market wrongly anticipated an early pivot; this has the feel of a similar setup.
Given the conflicting signals, outright directional bets are risky ahead of the Fed’s decision on Wednesday. We believe buying volatility through options is a prudent strategy, as a significant market reaction seems likely regardless of the outcome. The VIX has been trending near a low of 14, a level we last saw consistently in early 2024, suggesting that long volatility strategies are relatively inexpensive.
