Insights 
VT 
The Baker Hughes US Oil Rig Count reported a total of 418, slightly below the expected 421. The discrepancy in the rig count may have implications for market activities and oil pricing.
Trade tensions have increased as new tariffs on China were announced to commence on 1 November. President Trump has suggested a possible halt in negotiations with China due to ongoing trade disputes.
Currency Market Reaction
The EUR/USD rate saw a rebound to 1.1620 amidst escalating trade tensions. Similarly, GBP/USD climbed to fresh intraday highs as the US dollar weakened against the Sterling Pound.
Gold reached a price of approximately $4,020, driven by demand for the safe-haven metal amid US-China trade tensions. In the cryptocurrency space, Bitcoin, Ethereum, and XRP are maintaining key support levels, despite potential downside risks.
US tariffs continue to be a primary tool for foreign policy and public finance. Over recent months, the US has reaffirmed its position on using tariffs to influence international trade relations.
Litecoin showed positive momentum, trading at about $130 as retail interest increased. The asset’s performance contrasts with broader market volatility and bearish trends in the cryptocurrency sector.
Market Trends and Opportunities
With the US oil rig count now at 418, we see a continued decline from the 620-level we saw back in late 2023. However, demand destruction fears from the renewed US-China trade war are overwhelming any supply-side tightness, pushing WTI crude below $60. We see opportunities in buying WTI put options to hedge against a further slide towards the $55 mark in the coming weeks.
Gold breaking the $4,000 level is a significant bullish signal driven by classic safe-haven demand. This reminds us of similar flights to safety during the global uncertainty of 2020 and the inflation shock of 2022. We anticipate continued inflows, making long positions in gold futures or call options attractive as geopolitical risk remains elevated.
The crumbling Dow Jones signals a clear risk-off move in equities, and we should position accordingly. We expect the CBOE Volatility Index (VIX) to push higher, much like it did during the trade disputes of 2019 when it frequently spiked above 20 on tariff news. Buying VIX call options or S&P 500 put options offers a direct way to profit from this escalating uncertainty.
Despite typical risk-off dynamics, the US Dollar is weakening as the market prices in the negative economic blowback from renewed tariffs. This has pushed EUR/USD above 1.1600 and suggests a bearish outlook for the dollar index (DXY). We see this as an opportunity to short the dollar against a basket of G10 currencies through futures or options.
