The economic calendar is empty for Asia on Monday, July 28, 2025. There are no major economic data releases planned for the day. Earlier news includes the Euro gaining value because of a new trade deal between the US and EU. This agreement comes with a 15% tariff rate, and the EU will buy energy from the US.

US and China Meeting

The US and China will meet in Stockholm on Monday, with a 90-day extension expected. This meeting could affect future trade agreements between the two countries. In the FX market, it’s a typical Monday morning with low liquidity. Prices may change quickly until more Asian markets start trading. With the new trade deal, we expect less overall market volatility. The resolution of a significant trade uncertainty could lower the VIX index, which often falls by over 15% in the months after major international deals. This suggests that selling volatility through strategies like short straddles on major indices might be profitable. The details of the deal, especially the EU’s commitment to buy American energy, should support the Euro in the long run. This situation is similar to after 2022 when U.S. LNG exports to Europe increased by over 140%, changing energy flows and currency values. We see value in preparing for further strength in EUR/USD, possibly using call options to limit risk while allowing for potential gains.

Stockholm Meeting Implications

Regarding the Stockholm meeting, the expected 90-day extension in U.S.-China talks is just a delay, not a final solution. This situation creates opportunities for calendar spread trades, similar to what we saw during the 2018-2019 trade disputes. Short-term volatility often drops after truce announcements but spikes again as deadlines approach. We think it’s wise to sell near-month volatility on assets sensitive to China while buying deferred contracts. With no major economic news today, market direction will largely depend on news sentiment. The low liquidity noted earlier increases the risk of sharp price changes based on any new headlines. We recommend being cautious when entering positions until trading volumes increase as more global centers open. Create your live VT Markets account and start trading now.

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