Insights 
VT 
In October, South Africa’s total new vehicle sales reached 55,956 units, compared to 54,700 units previously.
The market data indicates a growth in sales numbers, reflecting a positive shift in the automotive sector within the region.
Major Currency Movements
Major currencies experienced fluctuations with the EUR/USD remaining near three-month lows, despite weaker US manufacturing data. GBP/USD, holding near its lowest level since April, was under pressure due to concerns over the UK’s fiscal environment.
The price of gold showed modest gains, trading above $4,000 per troy ounce. Rising US Treasury yields appeared to impact the precious metal’s price.
Meme cryptocurrencies like Dogecoin and Shiba Inu saw losses as investor interest declined. On the other hand, Cardano’s price dropped 6%, trading below $0.58, with increasing short positions indicating bearish sentiment.
Amid such economic conditions, risk appetite remains cautious, with potential challenges to the US Dollar’s strength from upcoming events. The divergence of the Aussie and the Pound is also noteworthy ahead of next week’s central bank meetings.
Anticipated Economic Changes
Given the firm US dollar, we should anticipate continued pressure on major currency pairs in the coming weeks. Despite the US ISM Manufacturing PMI for October coming in at a contractionary 48.7, the dollar’s strength signals that traders are focused on interest rate differentials over immediate manufacturing health. With Fed officials remaining non-committal about the next meeting, any hawkish commentary will likely fuel further dollar gains.
We see opportunities in focusing on central bank divergence, particularly with the Bank of England and Reserve Bank of Australia meetings on the horizon. The pound is struggling around the 1.31 area, weighed down by the same fiscal concerns we have seen resurface periodically since the market turmoil back in 2022. Derivative plays that bet on continued sterling weakness against the dollar, such as buying puts on GBP/USD, could be advantageous.
In emerging markets, the South African economy is showing surprising resilience. The latest new vehicle sales figure of 55,956 for October is a strong beat and a notable increase from the roughly 45,000 units sold in the same month back in 2023. This data suggests underlying consumer strength, making the rand a potential outperformer against other commodity currencies like the Aussie dollar.
The risk-off sentiment is most apparent in speculative assets, signaling that we should be cautious. The fading whale interest in meme coins and rising short positions in assets like Cardano suggest a broad exit from high-risk trades. This move away from speculation aligns with gold holding firm above $4,000, a level that reflects the significant inflationary pressures we navigated through 2024.
For the weeks ahead, volatility is the main theme, and options strategies could be effective for managing risk around the central bank announcements. Straddles or strangles on GBP/USD and AUD/USD could capture sharp moves in either direction following their respective policy meetings. At the same time, the bearish signals from the crypto space may warrant looking at shorting crypto futures or buying puts on related equities.
