Insights 
VT 
In September, the United States NFIB Business Optimism Index recorded a figure of 98.8, falling short of the expected 100.5. This indicates a lower-than-anticipated sentiment among small business owners during this period.
At the same time, the EUR/USD pair remained defensive near 1.1550, influenced by intensified safe-haven demand for the US Dollar. Meanwhile, the GBP/USD pair decreased towards 1.3250 after an unemployment rate increase to 4.8% in the UK.
Gold’s Stability and Market Reactions
Gold maintained its position above $4,100 as safe-haven buying counterbalanced the strengthening US Dollar. Economists are awaiting Fed Chair Jerome Powell’s speech to glean insights on potential policy changes, with some expecting two more rate cuts this year.
Tension in China has contributed to a risk-averse mood in financial markets, suggesting the global stock market might face more resistance. Amundi is planning to introduce its first Bitcoin exchange-traded product in early 2026, a pioneering move for a leading European asset manager.
The drop in the NFIB Business Optimism Index to 98.8 signals that small businesses are growing cautious about the future. Given that initial jobless claims have also been trending higher over the last month, recently hitting 235,000, we see this as a warning sign for the broader US economy. This environment suggests that buying put options on equity indices like the S&P 500 could provide valuable downside protection in the weeks ahead.
Markets are now pricing in two more interest rate cuts from the Federal Reserve this year, making Chair Powell’s upcoming speech critical. We remember how markets sold off aggressively when the Fed failed to meet dovish expectations in late 2023, so any hint of hesitation from Powell could trigger a similar reaction. Traders might consider using straddles on major indices to play the potential for a large move in either direction following his remarks.
Global Economic Concerns
Gold holding firm above $4,100 even as the US Dollar strengthens is a significant sign of fear in the market. The dollar index (DXY) has climbed over 2% in the last three weeks, yet gold continues to act as a primary safe haven. This unusual strength suggests that call options on gold and the US dollar remain attractive hedges against escalating geopolitical tensions and economic uncertainty.
Weakness is not isolated to the US, with European data also painting a bleak picture. The latest German ZEW Economic Sentiment survey fell to -15.2, its lowest point this year, while UK unemployment ticked up. This reinforces the case for positioning for further declines in EUR/USD and GBP/USD through put options or by selling futures contracts.
