Insights 
VT 
The ISM Services PMI for October in the United States came in at 52.4, surpassing expectations of 50.8. This data affected various markets, including a 300-point rebound in the Dow Jones Industrial Average.
In the commodities sector, WTI Crude Oil fell below $60 following unexpected reports of inventory builds. Gold saw over a 1% increase, despite the strong US data impacting market moods.
FX Market Movements
The FX market experienced movements with NZD/USD slightly rising on news of China tariff relief, amid a weak New Zealand labour market. EUR/USD struggled to gain direction under the 1.1500 mark.
GBP/USD maintained gains just below the 1.3050 level, as attention shifted towards the BoE meeting, amid expectations of an unchanged policy rate at 4.00%.
Ethereum showed signs of recovery, trading upward after previous declines. Elsewhere, Stellar faced potential losses following the emergence of a Death Cross pattern.
Upcoming events include the US Supreme Court and further US economic data, both expected to challenge the Dollar’s strength. Meanwhile, sentiment in the market remains mixed after recent earnings and trade developments.
Continued US Economic Strength
The stronger-than-expected ISM Services report at 52.4 confirms the US economy is not slowing down as many had anticipated. We saw similar resilience in the third quarter of 2025 when GDP growth was reported at a robust 2.9%, suggesting underlying strength in consumer and business activity. This data makes it difficult to bet against the American economy in the near term.
This sustained economic strength likely puts the Federal Reserve in a holding pattern, pushing back expectations for any further rate cuts this year. The market is now pricing this in, with Fed Fund futures showing less than a 15% chance of a rate cut before the second quarter of 2026. Consequently, we see continued strength in the US Dollar, creating opportunities for those positioned long on the greenback.
For equity index traders, the strong services data supports a bullish outlook on the S&P 500, but the ongoing government shutdown introduces significant volatility. We’ve seen in the past, like during the 2018-2019 shutdown which shaved an estimated 0.2% off GDP, that political gridlock can unnerve markets unexpectedly. This environment is ideal for strategies like purchasing call options on the SPX while also holding some cheaper, out-of-the-money puts for protection.
The dollar’s dominance is putting pressure on foreign currencies, particularly the Euro, which is struggling to hold its ground. With recent Eurozone inflation figures for October 2025 coming in at a tepid 2.1%, the European Central Bank has little reason to adopt a more hawkish stance. This policy divergence should keep the EUR/USD pair heavy, making put options on the Euro an attractive hedge or speculative position.
Gold’s climb towards $4,000 an ounce despite a strong dollar tells us that traders are buying it as a hedge against systemic risk, most likely the government shutdown. Looking back, we saw similar behavior during the debt ceiling crisis of 2023 when gold rallied even as bond yields rose. This suggests that call options on gold could perform well as long as political uncertainty remains elevated in Washington.
In the energy markets, the surprise inventory build reported by the EIA is the dominant factor, pushing WTI crude below $60 per barrel. The report showed a build of over 4 million barrels when a small draw was expected, signaling that supply is currently outpacing demand. We believe this trend will continue, making short positions or buying puts on oil futures a viable strategy for the coming weeks.
