Insights 
VT 
During the G7 meeting, Trump expressed optimism about reaching an agreement with Canada, stating they were exploring various ideas including those proposed by Carney. Trump emphasised his stance on tariffs and acknowledged differing perspectives, but believed an agreement was within reach.
Regarding international relations, Trump mentioned that Iran showed interest in discussions, but emphasised they should have initiated talks earlier. He also noted that Iran was not succeeding in the current conflict. On the topic of Putin, Trump argued that Putin would not be welcome back at the G7 due to past events, suggesting his exclusion from the G8 was felt strongly by him.
Economic Commentary
In addition, Trump mentioned that including China in the G7 wasn’t an unfavourable idea. Market reactions to these comments were minimal, with some optimism surrounding trade discussions. However, it was noted that there seemed to be a lack of alignment, casting doubt on the possible success of negotiations.
The comments made during the G7 summit give us several noteworthy signals to factor into upcoming positions. The assertion that a deal with Canada remains a possibility, and that discussions include input from Carney, shows that economic dialogue remains open and multi-threaded. While direct outcomes have not been finalised, the openness to exploring varied proposals suggests a baseline of cooperation, at least rhetorically.
That Trump continues to lean on tariff policy as leverage reflects a consistent preference for economic pressure tactics. Markets have generally priced in this approach by now, yet the reiteration reinforces uncertainty over timing—volatility may persist around announcements that suggest immediate shifts, particularly if unexpected concessions or setbacks emerge in these ongoing discussions.
The comments on Iran, notably their delayed willingness to negotiate and apparent mismatches in objectives, can be interpreted as prolonging geopolitical risk in the region. We may see elevated premiums on energy-related derivatives, especially those linked to oil or Gulf-exporting currencies. When near-term dialogue seems unattainable or is pushed further out, market sensitivity to flashpoints tends to increase, particularly ahead of any scheduled diplomatic deadlines or military statements.
Market Strategy Recommendations
On the matter of Putin and Russia’s G7 exclusion, the narrative remains unchanged, and this steadiness dampens market impact. However, ongoing exclusion implies predictability around sanctions policy and long-term contracts in Eastern Europe. It reduces uncertainty in one sense, but we must remain alert to any shifts in language or third-party support from other G7 members.
As for China, the mention of including them in G7 institutions is rhetorically soft and opens room for speculative recalibration of trade alliances. There are no direct consequences evidenced in pricing, but derivative traders should be aware of the underlying implication—should discussions ever progress formally, this would have sudden implications for longer-term hedges in indices and manufacturing-linked assets.
We noticed the overall reaction to these announcements was muted, hinting that the market was not caught off-guard. The small positive response around trade talks is more reflective of relief than enthusiasm. The perceived lack of cohesion among negotiators likely tempers expectations. From a strategy point of view, premiums on both sides of the volatility curve may remain attractive for straddle positions, particularly ahead of scheduled bilateral meetings.
We recommend closely mapping geopolitical developments to their corresponding asset classes and tracking deviations from entrenched sentiments. Stay wary of binary statements that may seem inconsequential but lead to a rally in implied volatilities. Options pricing still seems conservative in some cross-asset plays, especially where trade-sensitive currencies or commodity-based contracts are concerned. Short-term moves could be rapid should rhetoric shift, even in the absence of formal policy changes.
Monitoring tone is just as essential as substance. When overtures are dismissed or downplayed, markets may turn to defensive structures. High-deliverability assets and dollar-linked hedging remain in favour when clarity is absent. Be ready to pivot on open interest shifts that may indicate deeper change than headlines suggest.
