China’s chief trade negotiator, Li Chenggang, visited Canada for discussions. He co-chaired the Joint Economic and Trade Committee in Ottawa, engaging in open talks to enhance bilateral trade relations.<\/p>\n
The discussions focused on finding concrete methods to improve economic ties between China and Canada. Both countries committed to maintaining communication to ensure forward progress.<\/p>\n
China is prepared to address any differences with Canada through practical actions and constructive dialogue. The visit underscores the intent to solidify and advance the trade relationship between the two nations.<\/p>\n
The recent talks in Ottawa suggest a stabilization in Sino-Canadian relations, which we see as reducing downside risk for key sectors. While not a major breakthrough, this shift towards “pragmatic” dialogue lowers the probability of new tariffs in the near term. This lessens the uncertainty that has weighed on specific Canadian equities throughout 2025.<\/p>\n
We believe this development should lead to a decline in implied volatility on Canadian assets with high Chinese exposure. Traders might consider strategies that benefit from this, such as selling puts on the S&P\/TSX 60 ETF or specific commodity producers. After seeing volatility metrics spike during the trade disputes of early 2025, a return to normalcy seems probable.<\/p>\n
This is particularly relevant for our commodity markets, especially agricultural products and potash. Bilateral trade dipped by nearly 5% year-over-year in the first half of 2025, but a normalization could see a rebound in shipments to China, which historically buys over 3 million tonnes of Canadian potash annually. We anticipate renewed buying interest in futures contracts for these goods.<\/p>\n
A thaw in relations is supportive of the Canadian dollar, which has been lagging below the 0.73 USD mark for much of the third quarter. Improved trade flows could provide a catalyst to break this range, making call options on the CAD\/USD currency pair an interesting tactical play. We are watching for a move back towards the levels we saw in late 2024.<\/p>\n
We also see opportunities in options on Canadian companies in the transportation and natural resource sectors that rely on Chinese demand. For much of the last year, these names saw higher hedging costs due to political uncertainty. Those costs are now likely to decrease, which could provide a tailwind for their share prices.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Li Chenggang visited Canada, fostering open dialogue and cooperation to strengthen China-Canada economic and trade relations.<\/p>\n","protected":false},"author":62,"featured_media":16966,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-29750","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/29750","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=29750"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/29750\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16966"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=29750"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=29750"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=29750"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}