Insights 
VT 
In September, the Canada New Housing Price Index rose slightly from -0.3% to -0.2%. This indicates a minor improvement in housing prices month-on-month.
The EUR/USD saw pressure due to strong US PMI data, with a shift in focus anticipated towards upcoming Fed and ECB meetings. The GBP/USD held gains around 1.3340, influenced by robust US PMI figures.
Market Trends
Gold prices increased past $4,100 per troy ounce, with market attention on US-China trade and US government shutdown developments. Meanwhile, Bitcoin traded above $111,000 as Ethereum and Ripple showed a minor upward trend.
Amidst a US government shutdown, speculation persists about a possible rate cut from the Fed next week. JPMorgan Chase is on track to introduce loans backed by Bitcoin and Ethereum for institutional clients by year-end.
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Federal Reserve and Market Outlook
The market is pricing in a Fed rate cut next week, but the strong October US PMI figures challenge this view. We saw a similar divergence back in late 2023 when business activity remained strong even as inflation signals softened. This uncertainty suggests buying straddles or strangles on major USD pairs could be a viable strategy to play the potential volatility from the Fed’s announcement.
With the EUR/USD pulling back from the 1.1650 level, implied volatility is likely to rise ahead of the dueling Fed and ECB meetings. Looking back at periods of central bank policy divergence, such as in 2022, the dollar tends to benefit from any hint of hawkishness relative to peers. Traders might consider protective puts on EUR/USD and GBP/USD to hedge against a surprisingly firm stance from the Fed.
Gold’s strength above $4,100 is a direct response to the ongoing US government shutdown and trade war jitters, creating classic safe-haven demand. This price reflects the significant inflation we experienced in the years leading up to 2025, which eroded confidence in fiat currencies. Selling out-of-the-money put options on gold futures could be a way to collect premium while expressing a bullish-to-neutral view on the metal.
Bitcoin’s push above $111,000 follows the historical pattern seen after the 2024 halving event, which historically kicks off a major bull cycle. The news of JPMorgan’s institutional crypto-backed loans confirms the trend of mainstream financial adoption we’ve been tracking. Traders with long spot positions could use call options to amplify upside or buy puts for downside protection as volatility remains high.
The slight improvement in Canada’s New Housing Price Index does little to change the bigger picture for USD/CAD. The Canadian economy is showing signs of softness, especially compared to the robust US PMI data. This reinforces a bullish outlook for the US dollar against the loonie, making long USD/CAD futures or call options an attractive position heading into the central bank meetings.
