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VT 
The US four-week bill auction yield decreased to 3.945% from a previous yield of 4.03%. This reduction in yield was part of recent market activity observed in the financial sector.
In forex news, GBP/USD dropped for the fifth day, positioning near the 1.3300 level, while EUR/USD remained near 1.16. Gold is attempting to recover around the $4,150 per ounce mark, stabilised by market conditions ahead of US CPI data.
Ethereum Market Activity
Ethereum investors, known as whales, continue accumulating despite mixed on-chain metrics. Wallets with 10,000 to 100,000 ETH have increased their holdings by over 200,000 ETH.
In Japan, the yen stabilised following the appointment of a new Prime Minister, Sanae Takaichi. The cryptocurrency market showed overall positive sentiment, with Aster’s price moving slightly above $1.00 alongside Bitcoin and Ethereum gains.
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The recent dip in the 4-week T-bill auction yield to 3.945% is a subtle but important signal. This move below the 4% mark, for the first time in six months, suggests that markets are beginning to price in a less aggressive Federal Reserve. We should therefore consider positioning for a potential dovish surprise in the upcoming US Consumer Price Index (CPI) data.
Impact of US CPI on Financial Markets
All eyes are on the US CPI release, which will dictate market direction for weeks. Current consensus forecasts point to a year-over-year core inflation rate of around 3.8%, a figure that has kept markets on edge. We remember the sharp, algorithmic-driven selloffs that followed hot inflation prints back in 2022 and 2023, making options strategies that profit from volatility attractive.
In the currency markets, we see EUR/USD holding firm near the 1.16 level, acting as a key pivot point ahead of the data. For GBP/USD, which is sliding toward 1.33, the combination of upcoming UK retail sales and the US CPI could create a significant downward move. Buying put options on the British Pound offers a defined-risk way to trade this potential weakness.
The Dow Jones is trying to stabilize, but we should remain cautious. Using derivatives to hedge long portfolios, such as buying puts on the SPY exchange-traded fund, is a prudent strategy until the inflation picture becomes clearer. A CPI number above 4% could easily erase the week’s tentative gains.
Gold’s consolidation around $4,150 per ounce shows its continued value as a safe haven and inflation hedge, a role it has played well since the banking turmoil of 2023. We can use call options to maintain upside exposure to gold, which would likely benefit from either a flight to safety or a hot inflation reading. Meanwhile, with crude oil challenging its 50-day moving average on sanction news, a volatile move higher seems likely, favoring long positions in WTI futures.
