Rolling Options Explained, Part 1: Understanding The Basics And Why Rolling Matters

SAXO

Economic

Forex

Stocks

Summary:

Rolling lets you adapt an options trade without starting over - by changing the strike, expiry, or both. This first article in a four-part guide introduces the concept using covered calls and cash-secured puts, with clear examples of both offensive and defensive rolls.

Rolling options, part 1: understanding the basics and why rolling matters

This article is part of a four-part mini-series on rolling options—created for investors and active traders alike. Whether you’re just starting out or already trading more advanced strategies, understanding how and when to roll will help you manage risk, stay flexible, and adapt with confidence.

● This is part 1: understanding the basics and why rolling matters.

● Want to see how rolling works with spreads? Read Part 2: managing spreads with confidence. (to be published)

● Curious about how to handle rolls around earnings, dividends, and key events? Go to Part 3: navigating events and knowing when to exit. (to be published)

● Want a quick-reference guide with answers to real-world situations? See Part 4: frequently asked questions and real-world scenarios. (to be published)

If you’ve ever found yourself wondering what to do with an options position that’s moving faster—or slower—than expected, you’re not alone. It’s a common moment for both new and experienced investors: the trade is still in play, but the timing, price, or outlook has shifted. This is where rolling comes in.

Rolling simply means closing your current option and replacing it with another one on the same stock, but with a different expiration date or strike price. It’s like rescheduling a meeting that still matters—you’re not cancelling, just adjusting it to fit the new context.In this first part of our series, we’ll look at rolling through the eyes of a beginner. We’ll explore how it works, why you might use it, and walk through two real-world examples: a covered call and a cash-secured put. Along the way, we’ll keep the tone practical, approachable, and grounded in real decisions investors face.

A fresh way to look at rolling

Think of it like booking a holiday months in advance. You had good reasons for choosing the dates and destination at the time, but now that the trip is approaching, something’s changed—maybe the weather, your schedule, or the travel deals. Instead of cancelling the trip altogether, you reschedule it: same idea, different timing, and a better fit for your needs now. That’s the basic idea behind rolling in options. You’re still in the same game, just giving yourself a different position and more time to work with.

Let’s say you’ve sold a put option on Company ABC—a bullish position where you’re happy to buy the stock if it dips, but ideally you'd prefer to collect the premium without being assigned. The stock pulls back a bit—not dramatically, but just enough that your short put is feeling a bit too close for comfort. You’re not quite ready to take the shares, and you want to keep some flexibility. So, you roll: you buy back the current put and sell a new one, with a slightly lower strike and more time to expiry. Same strategy, new setup.

This is all rolling means:

● You close the current option trade.

● You open a new one—on the same stock—with a different expiration or strike.

Our platforms make this easy by letting you do it in one step with a "roll" ticket. But beneath the surface, it’s simply two trades.

The three things you adjust when you roll

Rolling lets you tweak the key ingredients of an option:

● Time — You can extend the expiration, giving the trade more time to play out.

● Strike price — You can move the strike closer to or further from the stock’s current price.

● Size — You can keep the same number of contracts, reduce your exposure, or adjust the width of a spread. (For beginners, it’s usually best to keep this constant.)

These changes help you adapt the trade to match a new outlook or to better manage risk.Important note: The strategies and examples described are purely for educational purposes. They assist in shaping your thought process and should not be replicated or implemented without careful consideration. Every investor must conduct their own due diligence, considering their financial situation, risk tolerance, and investment objectives before making decisions. Remember, investing in the stock market carries risks, so make informed decisions.

A covered call in motion

Imagine you bought 100 shares of Company ABC at $100. To generate income, you sell a call option with a $105 strike that expires in three weeks. You collect $1.50 in premium.Now Company ABC climbs to $104. Your call is nearly in the money. You still like the stock and want to leave room for more upside. So you roll the short call up and out—maybe to the $110 strike, one month further out. You collect an additional $0.80.This is what’s called an offensive roll. Things are going well, and you're adjusting the trade to give yourself more opportunity. You’re still in the trade, but you’ve given it more time and space.

A helpful comparison: think of this like a freelance job that’s going well. You renegotiate the contract—longer term, slightly better terms, and a bit more pay. You’re still doing the same work, just with a setup that makes more sense now.Now flip the situation. Company ABC falls to $95. Your call is far out-of-the-money, and there’s little premium left. You might choose to roll it down and out—say, to the $102 strike next month. That brings in $0.60 in new premium and slightly improves your breakeven.This is a defensive roll. The trade hasn’t worked out as planned, but you’re staying calm and making a measured adjustment to improve the setup.

Rolling covered calls gives you a way to stay engaged with your positions without being boxed in by the original plan.

A cash-secured put in a shifting market

Now consider the other side of the coin: a cash-secured put. You sell a $95 put on Company ABC, 21 days to expiration, collecting $2.00. If assigned, you'd be happy to own the stock at $93.But Company ABC rallies to $104. The put is now worth very little. Rather than close it for pennies, you decide to roll up and out—you close the $95 and sell a $100 put for next month, collecting another $0.70. Your potential entry point moves higher, and you’ve collected more income.This, again, is an offensive roll. You’re using strength in the stock to reposition, just like arriving early at a train station and waiting for a more direct train with better seating.

If Company ABC drops to $92, you may feel the pressure building. Instead of letting the option run straight into assignment, you roll down and out to the $90 strike, one month out, and take in $0.60. Now your breakeven is lower, and you’ve given the position more time to stabilise.Cash-secured puts work well when markets are stable, but rolling gives you a way to navigate the more turbulent stretches with control and intent.

What separates offensive and defensive rolls

The mechanics of rolling are the same whether the trade is going well or not. The key difference is your intent:

● An offensive roll is used to extend a good setup. You’re building on strength—more time, more credit, or better positioning.

● A defensive roll is used to reduce risk, improve your breakeven, or keep a position alive without taking on additional stress.

Rolling shouldn’t be automatic. It’s not a button you press when uncertain. It’s a choice that should come from understanding the trade’s new shape, and what you want from it now.

Wrapping up

Rolling gives you options—literally and figuratively. It’s a practical way to stay active in your positions without starting from scratch. You can shift your risk, extend your timeline, or give yourself another chance to earn income. And all of it can be done within the comfort of strategies you already know.In part 2, we’ll build on this foundation and explore how rolling works in more complex strategies like vertical spreads and iron condors—showing how adjustments change risk and reward.

Source: SAXO

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Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Adam

Stocks

Economic

U.S. stock futures hover around the flatline after the indices surged to new highs in the previous session. Photoshop-owner Adobe lifts its annual revenue and profit guidance thanks to solid demand for its artificial intelligence-infused products. A survey of U.S. consumer sentiment is due out, with economists set to keep tabs on household inflation expectations. Meanwhile, ChatGPT-maker OpenAI and Microsoft reach a non-binding agreement over the AI start-up’s plans to become a for-profit company.

Futures muted

U.S. stock futures were subdued on Friday, after Wall Street’s main averages logged steep gains in the prior session on economic data which cemented expectations for a Federal Reserve interest rate cut next week.

By 03:34 ET (07:34 GMT), the S&P 500 had slipped by 3 points, or 0.1%, Nasdaq 100 futures were mostly unchanged and Dow futures had dipped by 32 points, or 0.1%.

On Thursday, the blue-chip Dow Jones Industrial Average notched a record-high close. The benchmark S&P 500 and tech-heavy Nasdaq Composite also rose by 0.85% and 0.72%, respectively, touching all-time peaks as well.

Underpinning sentiment were figures showing that U.S. consumer price growth accelerated in August, albeit roughly in line with expectations, while weekly initial jobless claims ticked up to nearly a four-year high. The numbers reinforced bets that the Fed would slash rates at its September 16-17, with officials seen prioritizing an easing labor market over sticky inflation.

Markets are now all but certain the Fed will reduce borrowing costs from their current range of 4.25% to 4.5% by at least 25 basis points, according to CME’s FedWatch Tool. There is around a 7% chance the central bank will opt for a deeper, half-point drawdown.

Along with the data, the indices were buoyed by a surge in shares in electric carmaking giant Tesla. Micron Technology also advanced by 7.5% following a move by Citigroup to lift its price target of the memory chip manufacturer.

Adobe raises outlook

Adobe raised its annual financial forecasts, citing solid demand for its artificial intelligence-enhanced design software tools.

Shares in the maker of popular editing platforms like Photoshop and Premiere Pro increased by a little over 3% in extended hours trading.

Still, the stock has slipped by more than 20% so far this year, as investors fret over Adobe’s ability to show returns from its heavy investments in AI. Grappling with intensifying competition from smaller peers like Figma, Adobe has rolled out Firefly, which harnesses AI to help users craft videos and images from text prompts.

Analysts remain worried that Firefly may not spur widespread adoption of Adobe’s offerings, although CFO Dan Durn told Reuters that new users and subscribers have been the predominant drivers of growth.

Adobe said it now expects fiscal 2025 revenue to between $23.65 billion and $23.70 billion, compared to $23.50 billion to $23.60 billion previously. Full-year adjusted per-share profit is tipped to come in at $20.80 to $20.85, versus a prior outlook of $20.50 to $20.70.

Michigan consumer sentiment survey ahead

Investors will have the chance to pour through more economic indicators on Friday, with the headliner set to be a gauge of consumer sentiment from the University of Michigan.

Economists anticipate that the survey for September will match the prior month. In August, the measure slipped to 58.2, as households remained concerned by the potential impact of sweeping U.S. tariffs on prices.

Consumers’ 12-month inflation expectations ticked up to 4.8%, which would be well above the 2% target level pursued by the Fed. Long-run expectations came in at 3.5%. Analysts at ING said they would be "keeping a close eye" on these numbers.

On Thursday, figures from the Bureau of Labor Statistics showed that the consumer price index was 2.9% in the 12 months to August, compared to 2.7% in July and matching economists’ expectations. Month-on-month, the inflation gauge stood at 0.4%, faster than 0.2% in the prior month and slightly above forecasts of 0.3%.

Microsoft, OpenAI reach non-binding deal over OpenAI restructuring

Microsoft and OpenAI said on Thursday evening that they had reached a non-binding agreement over the AI start-up’s plans to transition to a for-profit organization.

Shares of Microsoft were higher in after-market trade following the announcement.

No specific terms of the arrangement were released by the firms, who in a joint statement said the agreement was for the “next phase” of their partnership. The two said they are “actively working to finalize contractual terms in a definitive agreement.”

OpenAI said the company’s non-profit entity will receive over $100 billion -- or around a fifth of the $500 billion valuation it is seeking in public markets -- "making it one of the most well-resourced philanthropic organizations in the world."

Faced with burgeoning revenue and a need to secure greater computing capacity to meet soaring demand, OpenAI has been looking to adopt a more conventional corporate structure and lock in partnerships with a wider variety of cloud providers. Microsoft, which previously had exclusive rights to sell OpenAI’s tools, has softened its hold in recent months, allowing OpenAI to go after a massive data center project.

Oil falls

Oil prices dipped, adding to the previous session’s sharp losses on fears around oversupply as well as a possible weakening in U.S. demand.

At 03:34 ET, Brent futures dropped 0.7% to $65.91 a barrel, and U.S. West Texas Intermediate crude futures fell 0.7% to $61.92 a barrel.

Oil fell nearly 2% on Thursday, but the crude benchmarks are still on course for weekly gains after strength at the start of the week on the potential for disruptions to output or trade flows from conflict and war.

An Energy Information Administration report on Wednesday said U.S. crude stocks rose last week by 3.9 million barrels to 424.6 million barrels, suggesting demand in the largest energy consumer in the world is set to slow as the year progresses.

Additionally, the International Energy Agency said in its monthly report world oil supply would rise more rapidly than expected this year due to planned output increases by the Organization of the Petroleum Exporting Countries and allies like Russia, a group known as OPEC+.

Source: investing

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Michelle

Commodity

Economic

The U.S. Energy Information Administration (EIA) revealed its latest Brent spot price forecast for 2025 and 2026 in its September short term energy outlook (STEO), which was released on September 9.

According to its latest STEO, the EIA expects the Brent spot price to average $67.80 per barrel in 2025 and $51.43 per barrel in 2026. In its previous STEO, which was released in August, the EIA projected that the Brent spot price would average $67.22 per barrel this year and $51.43 per barrel next year.

A quarterly breakdown included in the EIA’s September STEO showed that the EIA sees the Brent spot price coming in at $68.35 per barrel in the third quarter of 2025, $59.41 per barrel in the fourth quarter, $49.97 per barrel in the first quarter of 2026, $49.67 per barrel in the second quarter, $52 per barrel in the third quarter, and $54 per barrel in the fourth quarter.

In its previous STEO, the EIA forecast that the Brent spot price would average $67.40 per barrel in the third quarter of this year, $58.05 per barrel in the fourth quarter, $49.97 per barrel in the first quarter of next year, $49.67 per barrel in the second quarter, $52 per barrel in the third quarter, and $54 per barrel in the fourth quarter.

“We expect the Brent crude oil price will decline significantly in the coming months, falling from $68 per barrel in August to $59 per barrel on average in the fourth quarter of 2025 and around $50 per barrel in early 2026,” the EIA said in its latest STEO.

“The price forecast is driven by large oil inventory builds as OPEC+ members increase production. We expect global oil inventory builds will average more than two million barrels per day from 3Q25 through 1Q26,” it added.

“We expect low oil prices in early 2026 will lead to a reduction in supply by both OPEC+ and some non-OPEC producers, moderating inventory builds later in 2026. We forecast the Brent crude oil price will average $51 per barrel next year,” it continued.

The EIA noted in its September STEO that it finalized its latest outlook before OPEC+ announced on September 7 that it plans to raise production by 137,000 barrels per day in October.

In a report sent to Rigzone by the Standard Chartered team on Wednesday, Standard Chartered projected that the ICE Brent nearby future crude oil price will average $61 per barrel in 2025 and $78 per barrel in 2026. In that report, Standard Chartered forecast that the commodity will come in at $65 per barrel in the fourth quarter of this year, $71 per barrel in the first quarter of 2026, $76 per barrel in the second quarter, $81 per barrel in the third quarter, and $83 per barrel in the fourth quarter.

Standard Chartered Bank analysts, including the company’s Head of Energy Research, Emily Ashford, highlighted in this Standard Chartered report that their machine learning model SCORPIO “sees the potential for price weakness this week, with a forecast of $65.31 per barrel for 15 September settlement”.

“U.S. rates, dollar strength and global equity markets are weighing on its forecast, as we now expect a larger 50bps Fed cut in September,” the analysts added.

“The model sees a pivot in money manager positioning as a positive driver; our combined crude oil index rose 14.4 week on week to -38.5. The index for WTI has risen from its -100 minimum to -98.9, and the Brent index is up 20.3 week on week to +30.7,” they added.

A BMI report sent to Rigzone by the Fitch Group on September 2 showed that BMI expects the Brent crude price to average $68 per barrel this year and $67 per barrel next year.

A Bloomberg consensus included in that report projected that the Brent price will average $68 per barrel in 2025 and $65 per barrel in 2026. BMI is a contributor to the Bloomberg consensus, BMI highlighted in that report.

Source: Rigzone

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Adam

Economic

Asia Market Wrap - Alibaba Surges

Asian stock markets are on the rise, following a positive trend in the U.S. market.

As a result, stock markets in Japan, South Korea, and Taiwan have reached new or near-record highs, with Japan's main index climbing 1% and South Korea's jumping 1.3%.

Meanwhile, Chinese stocks also hit their highest point in over three years, largely due to strong investor interest in companies related to artificial intelligence. Overall, a major index tracking Asian shares outside of Japan saw a significant 1.2% increase.

Major players like SK Hynix, Samsung, and TSMC saw their stock prices rise significantly. The e-commerce giant Alibaba also had a great day, with its stock soaring.

This strong performance has pushed the MSCI regional equity index that tracks Asian stocks up by more than 20% this year. In fact, it is now just a tiny fraction away from its highest point ever, which it reached in 2021.

UK Economy Stalls

The British economy didn't grow at all in July, which was exactly what experts had predicted. This came after a small increase in June.

While some parts of the economy did well, others performed poorly. The services sector (things like transportation and healthcare) grew slightly, as did the construction sector (helped by new home building). However, this was canceled out by a drop in the production of goods, especially in manufacturing. Factories that make things like electronics and medicine had a particularly bad month, though some other areas, like electrical equipment, did see an increase.

Looking at the past three months, the economy grew just a little bit. This was because the growth in services and construction was held back by the drop in production.

Compared to the same time last year, the economy has grown by 1.4%, which is the same as the month before but a bit less than what was expected.

The recent economic numbers don't really change what the Bank of England is expected to do.

The next week will be much more important because new reports on jobs and rising prices (inflation) are coming out. My view is that the Bank of England will be more likely to cut interest rates in November than most people think.

European Open - European Stocks Steady

On Friday, European stock markets were a little lower, after being slightly higher earlier in the day. The main reason for the drop was that healthcare company stocks went down.

For example, the stock for the drug company Novartis fell after an investment bank said it faced more competition from cheaper drugs.

Stocks for luxury brands like L.V.M.H. and Richemont also declined, as a different bank suggested they were not good investments right now.

The market is also waiting to hear whether a major ratings agency will lower France's credit rating, which is adding to the uncertainty.

On a positive note, companies in the aerospace and defense sector are having a very good week, with their stocks rising sharply. This is happening because of recent global tensions, which have boosted investor confidence in that industry. Despite the overall market drop today, French stocks are still on track to end the week with a gain.

On the FX front, the U.S. dollar is a little stronger today, but it is still on track to end the week weaker than it started.

The Euro didn't change much in value. It had risen the day before because traders now believe the European Central Bank is less likely to cut interest rates again, as the bank seems confident about the economy.

The British Pound is a bit weaker after new data showed the UK economy did not grow at all in July. Finally, the Chinese yuan and the Australian dollar also slipped slightly, although the Australian dollar remains near its highest value in almost a year.

Currency Power Balance

Oil prices are holding steady today because two different things are happening at the same time.

On one hand, there are worries that there's too much oil available and that the U.S. isn't buying as much. This would normally cause prices to fall.

On the other hand, there are concerns that ongoing conflicts in the Middle East and Ukraine could disrupt the flow of oil, which would cause prices to rise.

Since these two worries are balancing each other out, oil prices are not moving much today, after Brent and WTI benchmarks fell by 1.7% and 2% respectively on Thursday.

Gold prices are still holding around the $3650/oz handle.

The main reason for this is growing concern about the weak job market in the United States. This has made people more confident that the U.S. will cut interest rates several times before the end of the year.

The price of gold has now been rising for four weeks in a row.

Economic Data Releases and Final Thoughts

Looking at the economic calendar, the European session will be quiet moving forward with ECB policymakers speaking the highlight.

The US session will bring more inflation insights with the University of Michigan Sentiment and inflation expectation numbers due. This could stoke volatility depending on the data and could also impact longer term interest rate projections.

Chart of the Day - FTSE 100

From a technical standpoint, the FTSE broke out of the range we discussed yesterday before rising toward resistance at 9357.

The index has taken a breath in the early part of the European session but a test of the 9357 handle remains possible.

The one concern is that the RSI period-14 is in oversold territory and could lead to a pullback before continuing higher.

The smart move would be to wait for a pullback for would be bulls to get involved.

Support rests at 9295 before the range top will come into focus at 9267.

Markets Today: Alibaba Surges, UK Economy Stalls, Gold Holds Firm. FTSE Consolidates After Breakout_2

Source: marketpulse

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Glendon

Cryptocurrency

Historical data suggests that bitcoin BTC$115,080.71 has likely put in its September 2025 low, around $107,000 on the first of the month.

Looking back to July 2024, a consistent pattern emerges where bitcoin tends to form a bottom for the month within the first 10 days of each month.

The notable exceptions were February, June and August 2025, when the lows came later in the month, but even then, the market experienced a correction within those first 10 days before resuming its broader trend.

Speculatively, the reason bitcoin often puts in its low within the first 10 days of the month could be tied to institutional portfolio rebalancing or the timing of key macroeconomic events that tend to cluster early in the month.

"It’s worth noting that several futures and options markets expire on the final day of the month or the first day of the next, this can lead to short term volatility and a subsequent lull in trading activity as traders either rollover trades or reposition entirely,” said Oliver Knight, deputy managing editor, data and tokens, at CoinDesk.

Of course, past performance is not a guarantee of future results, but as Q4 approaches it is worth noting that this quarter has historically been bitcoin’s strongest, delivering an average return of 85%. October in particular has been especially favorable, with only two losing months since 2013.

Source: CoinDesk

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ING

Economic

Forex

USD: Three cuts validated

Yesterday’s US CPI report showed slightly hotter than expected headline inflation (0.4% MoM), while the more closely monitored core rate rose by 0.3% MoM in line with consensus. What matters the most is the limited tariff impact. Price increases were driven by airline fares, used cars, shelter, food, and energy, while recreation and medical care saw declines. Notably, core goods excluding autos rose just 0.1%, suggesting that companies are currently absorbing tariff costs in their profit margins, in line with what PPI trade services data showed earlier this week. It’s far from guaranteed that this profit-squeezing is sustainable, but for now, markets are receiving validation of Fed dovish bets.

And even more validation is coming from job market news. Initial jobless claims unexpectedly spiked from 236k to 263k in the week to 6 September, the highest since October 2021. This could be a signal of increasing layoffs amid an already soft hiring environment.Here is our preview of next Wednesday’s FOMC meeting. We are aligned with the markets and consensus in expecting a 25bp cut, to be followed by similar reductions in October and December. The data-led dovish repricing has now made three cuts firmly the markets’ base case too (72bp priced in by December).

The dollar’s drop yesterday looked substantial on paper, but our model shows that the greenback is expensive relative to the latest short-term rate swings against most of the G10. We expect dollar weakening as the Fed starts cutting, even if now priced in, as cheaper funding costs can further encourage USD selling for hedging purposes.Today, we’ll see the University of Michigan surveys, keeping a close eye on inflation expectations, which currently stand at 4.8% for the year-ahead and 3.5% for 5-10 years. The balance of risks for the dollar remains tilted to the downside.

EUR: Lagarde doubles down on 'good place'

Yesterday’s ECB meeting proved more eventful than we had anticipated. After an initial dovish reaction to the statement – likely due to a slight downward revision in 2027 inflation forecasts – the euro spiked on the back of President Lagarde’s hawkish remarks. The balance of risks for growth is now seen as “more balanced”, and there was strong wording on the fact that the disinflationary process in the euro area is now over. At the same time, Lagarde steered clear of any headline-catching comments on French bonds, which we thought was a major dovish risk.

All in all, the implicit message to markets was that there are no reasons to keep pricing in additional rate cuts as things stand. Indeed, the implied probability of further easing dropped below 50% after Lagarde’s presser, offering strong rate-driven backing to the euro rally.While we wouldn’t fully rule out a resurgence of dovish sentiment – especially as tariffs, a strong euro, and geopolitical or sovereign debt risks may prompt future action – our baseline view remains aligned with market expectations: the ECB is done cutting rates.

The combined effect of hawkish ECB and US jobless claims spike sent the EUR:USD 2-year swap spread to -110bp, very close to the late September 2024 levels, when the Fed had just cut 50bp. While the spread is still some 35bp wider compared to the last time EUR/USD was trading at these levels four years ago, the medium-term rate-implied risk premium on the dollar has shrunk substantially, making further EUR/USD gains more feasible. A break above 1.180 in the near term now seems rather likely.

GBP: Awaiting key data

The pound has held up well against ECB-led euro strength. And if it’s central bank divergence we are looking at, EUR/GBP is hardly cheap.Some UK data for July were out this morning. Monthly GDP was in line with consensus (0% MoM, 0.2% 3M/3M), while industrial and manufacturing production dropped unexpectedly.Nothing in those figures carries significant implications for the Bank of England, though. Next week will be busy with jobs and inflation numbers: our BoE call (November cut) remains more dovish than markets’ and we see upside risks for EUR/GBP. But until those figures are released EUR/GBP may prefer the lower end of the 0.86-0.87 range rather than a break higher.

NOK: We narrowly favour a cut next week

We talked yesterday about the krone’s good performance, partly due to some domestic hawkish repricing. The Regional Network Survey didn’t make our call for next week’s Norges Bank meeting any easier, as it showed resilient output and hiring expectations.However, as per our meeting preview, part of those expectations is based on anticipated rate cuts. Plus, the real interest rate in Norway is elevated and the recent good NOK performance is another incentive to cut now. Markets are pricing in 15bp, and while we admit it’s a close call, we slightly favour a cut next week.

This should pave the way for a short-term EUR/NOK rebound (we target 11.70 near term), although strong NOK fundamentals still argue for a structurally lower EUR/NOK in the coming quarters.

Source: ING

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Adam

Stocks

Economic

MARKET WRAPS

Stocks:

European shares were down Friday ahead of a Fitch Ratings decision on France's sovereign rating.

The Stoxx 600 moved lower after gaining in the previous session supported by interest-rate cut hopes in the U.S. The CAC 40 was also slipping as investors braced for a potential France downgrade.

Societe Generale said the agency was likely to downgrade the country to A+, adding to investor caution and "reinforcing the case for a defensive stance."

In the U.K., new data showed that economic growth ground to a halt in July.

"The economy appears weighed down by weak household spending, subdued business investment, and persistent trade frictions," Moneyfarm said.

Shares on the Move

Mining stocks helped propel the FTSE 100 index to a record high in morning trade.

Much of the share-price growth has been concentrated on gold and silver stocks as precious metals continue to benefit from safe-have demand.

European oil stocks slipped in opening trade as worries about oversupply continued to mount. BP, Shell and TotalEnergies were among the fallers.

Economic Insight

It is still too soon for the European Central Bank and the market to fully rule out a rate cut just yet, Santander said. Santander maintained its long-held view that the ECB will not need to cut the deposit rate below 2%.

U.S. Markets:

Stock futures were falling Friday after surging to new highs the previous day on the back of hopes for interest-rate cuts.

Thursday's data showing labor market weakness could give the Federal Reserve more room to lean toward bolder action on rates if negative signals persist in the weeks ahead, according to XS.

Forex:

The euro was trading flat against the dollar. Commerzbank said the euro could rise above $1.20 but that won't necessarily pose a problem for the ECB.

The dollar edged higher against a basket of currencies, recovering only slightly from declines following Thursday's inflation and jobs data.

Commerzbank said the market took those readings as an opportunity to continue betting on significant interest-rate cuts by the Fed in coming months, despite higher inflation.

Monex Europe said the dollar was likely to remain weak even if it stabilized into the weekend with a light economic data calendar Friday.

Sterling fell slightly after the U.K. economy data.

Ebury said that re cent poor data alongside the threat of tax rises would "likely pour cold water on any growth revival in the second half of the year."

Bonds:

The 10-year Bund yield edged higher and SEB Research said it should trade in a 2.60%-2.80% range this autumn, and gradually rise next year, driven by fiscal pressure and Eurosystem balance sheet reduction.

It added that the two-year Schatz yield had only limited scope to fall, even if the ECB cut interest rates one more time.

Barclays said the pace of gross government bond supply in the eurozone was set to decelerate beyond September, given lower volumes of syndicated issuance.

Treasury yields rose in Asian trade, even as Thursday's CPI data were unlikely to be a game changer in the Fed's policy outlook.

SEB Research said Treasury yields were expected to move lower in the coming months, although not in a straightforward manner.

"Markets are choppy but the underlying trend points to lower yields."

Yields on gilts were steady after data showing that U.K. GDP was flat in July.

Energy:

Oil prices fell in early trade, extending the previous session's losses as concerns over looming oversupply and softening U.S demand overshadow geopolitical risks in the Middle East and Eastern Europe.

Metals:

Gold prices were poised for a fourth straight weekly gain on expectations the Fed would cut rates Wednesday.

"Softer U.S. labor data and an in-line August inflation print have given policymakers room to ease, while a weaker dollar and falling Treasury yields further support gold," MUFG said.

UBS reckoned gold would reach $3,800/oz by the end of 2025, up from a previous forecast of $3,500/oz.

The bank said expectations that the Fed would restart its easing cycle due to weak jobs data were fueling investor appetite.

Ongoing geopolitical uncertainties were also underpinning demand, it added.

EMEA HEADLINES

Sabadell Board Recommends Shareholders Don't Accept BBVA's $18 Billion Offer

The board of Banco de Sabadell recommended that its shareholders don't tender their shares to BBVA's hostile $18 billion takeover bid, which they have repeatedly said undervalues the bank.

The Spanish lender on Friday issued its board's opinion as the offer was finally put to shareholders earlier this week when BBVA received the last regulatory approval for the bid more than a year after it was first announced.

EU Won't Shy Away From Tough Antitrust Enforcement, Competition Chief Says

The European Union's top competition enforcer said officials couldn't let Alphabet's Google avoid a 2.95 billion-euro ($3.46 billion) fine for breaching the bloc's competition rules this month.

Speaking at a conference in Florence on Friday, Teresa Ribera said that Google "has repeatedly broken the rules of the game."

Russian Drone Incursion in Poland Tests NATO Defenses, Cohesion

The incursion of Russian drones into Poland marked a dangerous new phase in Moscow's confrontation with the West, posing a test for NATO allies and forcing them to divert more capabilities to the bloc's eastern flank.

In recent months, Russia has increasingly put historical rival Poland in its crosshairs. More Russian drones have violated Polish airspace, and an air assault on Ukraine in July damaged Warsaw's diplomatic mission in Kyiv.

Netanyahu Doubles Down on Elusive Goal: Conquering Hamas's 'Last Stronghold'

Ahead of a 2024 Israeli offensive in Rafah, Israeli Prime Minister Benjamin Netanyahu argued that the city in southern Gaza was the last bastion of Hamas, and "victory is within reach."

More than a year and a half later, the prime minister is once again predicting the war will be near its end if Israel captures Gaza City, the enclave's capital and what he says is Hamas's "last important stronghold."

GLOBAL NEWS

U.S. Stock Futures Largely Flat After Indexes Hit Record Highs

U.S. stock futures were taking a breather early Friday after all three indexes closed at fresh record highs. While data showed signs of elevated inflation, labor-market readings continue to indicate weakness and that means the Federal Reserve is all but nailed-on to cut rates next Wednesday. At the same time, an artificial-intelligence-driven tech boom has helped propel stocks higher. Due Friday, the University of Michigan's preliminary consumer survey for September will indicate how well sentiment is holding up.

-There was little movement in U.S. stock futures early Friday, with futures for the S&P 500 down less than 0.1% and futures for the Dow Jones Industrial Average off 0.1% after the index ended Thursday above 46000 for the first time. Nasdaq stock futures were up a touch.

Firm Inflation, Soft Jobs Data Pull Fed in Opposing Directions

Inflation firmed last month, with price increases picking up for goods such as cars and clothes and essentials like food and housing.

Consumer prices were up 2.9% in August from a year earlier, the Labor Department said Thursday, returning to the highest level since the start of the year. That was up from 2.7% in July and a recent low of 2.3% in April, but in line with expectations from forecasters, who have expected businesses to steadily pass along higher costs from tariffs on imported goods and materials.

Trump Pushes to Remove Fed's Lisa Cook Before Next Policy Meeting

The Trump administration is racing to sideline Federal Reserve governor Lisa Cook before next week's policy meeting, asking a federal appeals court to pause a lower-court order that restored her to the central bank's board.

In an emergency motion filed late Thursday, Justice Department lawyers urged the U.S. Court of Appeals for the D.C. Circuit to issue a stay by Monday, just one day before the Federal Open Market Committee meets to decide on a widely expected quarter-point rate cut.

China Warns Mexico Against Tariffs That Could Harm Chinese Goods

Beijing has warned Mexico to think twice before moving ahead with a plan to raise tariffs that could hurt Chinese automakers, saying it would retaliate against the measure.

"At a time when the U.S.'s abuse of tariffs has sparked widespread global opposition, countries should strengthen communication and coordination to jointly safeguard free trade and multilateralism, and must not sacrifice the interests of third parties due to coercion," a Chinese commerce ministry spokesperson said in a statement released late Thursday.

The Day After Tragedy Struck, a Utah Campus Comes to Terms With Its Grief

OREM, Utah-Sunrise broke over the Wasatch Mountains as usual on Thursday, but Phil Witt and his daughter, Sophie, knew this day was unlike any they had known.

"Surreal is very much how we feel," said Witt, who works at Utah Valley University, where Sophie is a freshman. "We both feel like we want to do something, but there's nothing really to do."

Brazil's Bolsonaro Sentenced to 27 Years in Prison

SÃO PAULO-Brazil's Supreme Court sentenced former President Jair Bolsonaro to 27 years in prison after finding him guilty of plotting a coup to overturn the 2022 election.

A panel of justices in Brasília voted 4-1 to convict Bolsonaro, setting the 70-year-old's jail term at 27 years and three months.