Insights 
VT 
The recent auction for the US 2-year note yielded an interest rate of 3.504%, down from the previous rate of 3.571%. Both EUR/USD and GBP/USD are seeing fluctuations tied to US-China trade developments and domestic economic concerns, respectively.
Gold is experiencing a challenging period, hovering near $4,000 per troy ounce, as decreased demand for safe-haven assets impacts its value. Ripple (XRP) continues to hold firm above its support level of $2.61, despite a 40% drop in open interest, signalling resilience in the cryptocurrency market.
Trust in the US Dollar
Trust in the US Dollar is waning, with many seeking alternatives such as Gold and Bitcoin. Meanwhile, Solana (SOL) is on an upward trajectory, trading above $204, lifted by heightened on-chain activity and substantial institutional interest.
Investors are watching the effects of developments like US-China trade thawing and anticipated central bank decisions on various markets. Notably, markets such as the Dow Jones Industrial Average have seen positive movements amid these global trade speculations.
We’re seeing a notable drop in the 2-year Treasury yield, which signals a shift in market sentiment. This suggests traders are pricing in a less aggressive stance from the Federal Reserve in their upcoming meeting. Options on federal funds futures, which currently show over a 70% probability of a rate hold through December 2025, could be used to position for this expected stability.
Effect of US-China Trade Relations
The apparent thaw in US-China trade relations is pushing equity indices like the Dow Jones higher, a pattern we saw during the trade resolutions back in 2019. With the VIX index hovering near a low of 14, selling put options on major indices could be a way to collect premium while betting on continued stability. However, holding some cheap, out-of-the-money call options on the VIX itself offers a hedge against any surprising announcements from the central banks.
We are observing a divergence in the US Dollar, as it weakens against the Euro but holds firm near highs against the Japanese Yen. This reflects the classic interest rate differential trade, with the Federal Reserve’s policy remaining tighter than the Bank of Japan’s. The Euro’s strength is further supported by recent data showing the Eurozone’s trade balance has remained in a surplus for the last three quarters of 2025.
Gold’s drop below the $4,000 level is a direct consequence of capital rotating out of safe havens and into equities. We’ve seen this reflected in net outflows from major gold ETFs, like GLD, which have reported a 2% reduction in assets under management over the past month. For traders anticipating a successful US-China summit, buying put options on gold futures could offer a defined-risk way to play further downside.
While the broader market is embracing risk, the theme of long-term dollar debasement continues to support assets like Bitcoin and Solana. The recent 6% weekly rally in Solana is fueled by a documented increase in institutional inflows, with a report from CoinShares last week showing a 15% month-over-month rise in assets under management for Solana-based products. Using options to construct bullish spreads on these crypto assets could capture upside while managing their inherent volatility.
