Reports suggest Trump and Xi are expected to hold a discussion on Friday, based on information from unnamed sources. This conversation pertains to trade talks between the US and China.

While there is speculation about Trump’s eagerness for a direct dialogue with Xi, it is anticipated that any conversation will follow pre-agreed terms. Such a call could happen after an agreement is in place, allowing Trump to potentially claim credit for any advancements.

Direct Exchange Between Leaders

The current remarks indicate the potential for a direct exchange between the American and Chinese leaders, with Friday marked as a likely date. The purpose of this call, according to reports, is not to negotiate terms in real time but rather to add a formal stamp to discussions that have already progressed across other channels. Despite speculation around one side’s preference for a personal show of diplomacy, it seems the conversation would only proceed after negotiators finalise the substance behind it.

The framing of such a call—as a post-fact ceremonial gesture rather than a live bargaining session—provides clues about where events actually stand. Rather than being about breakthroughs during the call itself, it would serve to demonstrate unity and reinforce the outcomes already paved by lower-tier negotiators. That implies movements, if any, will already be priced in by some market participants before the call occurs.

From our side, we have to consider the placement of headline risk in the weekly sequence. Quiet sessions early in the week may give way to broader positioning adjustments starting Thursday afternoon, in readiness for anticipated communication by Friday. Given the advance reports, there are expectations priced around a sense of narrative progress on tariffs or mutual commitments. However, care should be taken not to interpret the timing of the phone call as meaning that announcements will necessarily follow.

Market Reactions and Strategies

One point worth watching with precision is how the implied volatility curve reacts if confirmation of the Friday contact appears. Steepness on the short end could become a tell for a rise in short-term hedging costs going into the announcement window. That not only reflects uncertainty in outcome but also the sense that participants expect a directional cue to emerge—either from the event itself or from shifts in tone expressed afterwards via formal statements or press briefings.

Liabilities through options—particularly weekly contracts in indices and large-cap single names tied to exports—should be handled tightly. What’s been implied here isn’t that a new policy shift will take place during the call, but rather it might offer a platform for reinforcing committee-level progress. In that sense, any repricing may not come from surprise policy but instead from interpretation and perceived stability.

We would avoid strategies that rely on high conviction directional calls ahead of final clarity on content. Calendar spreads remain favourable if constructed with upper-expiry legs aligned with early policy meetings or transpacific summits in the coming months. On the flip side, leverage into short straddle structures remains risky given the chance for a one-sided narrative reaction post-call.

Separate from the derivatives themselves, flow over the next few sessions should be analysed not just for scale but also pacing. If the tone tightens midweek without catalyst, it may imply earlier positioning tapering than normal. That in turn could impact premiums heading into Friday, possibly softening realised ranges even if historicals suggest expansion.

It’s not the call itself doing the work—it’s how expectations gather and get distributed as we approach the supposed time.

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