Donald Trump recently spoke positively with President Xi of China. They discussed several important topics, including trade, Fentanyl issues, the Russia-Ukraine conflict, and the approval of the TikTok deal. They plan to continue conversations and will meet at the APEC Summit in South Korea. Trump is set to visit China early next year, and President Xi is also expected to arrive in the United States. They expressed their satisfaction with the TikTok deal and look forward to their APEC Summit meeting.

Market Implications

This news suggests a decrease in expectations for high market volatility. The VIX index, which was around 18 last week due to worries about trade talks, has dropped below 14 today. It might be a good idea to sell VIX call options or buy puts in anticipation of calmer markets as we approach the APEC summit. We should consider call options for sectors that heavily depend on China, which have underperformed for most of 2025. The semiconductor index (SOXX) is a key area, as many companies here earn a large part of their revenue from China. We saw a similar rise in these stocks during positive news in trade negotiations back in 2019. The discussions about trade and the Russia-Ukraine conflict also affect commodities. November soybean futures have increased as traders expect renewed agricultural buying, which Commerce Department data shows dropped by 12% in the first half of this year compared to last year. Long positions in agricultural ETFs or futures could be wise, as an upcoming meeting is likely to strengthen this demand.

Digital Advertising and Currency Markets

The approval of the TikTok deal takes away major uncertainty for social media advertisers and related e-commerce platforms. This may open up opportunities in call options for digital advertising companies that have faced declines in their valuations due to this risk. Additionally, it reduces the likelihood of retaliatory actions from Beijing against other U.S. tech firms in China. In currency markets, this development points to a “risk-on” sentiment, which generally weakens the safe-haven status of the U.S. dollar. The offshore yuan (CNH) has already appreciated against the dollar, moving from 7.31 to 7.26 overnight. If this positive trend continues, we could see further dollar weakness against commodity-linked currencies like the Australian dollar. Create your live VT Markets account and start trading now.

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