Insights 
VT 
The White House economic advisor, Kevin Hassett, shared insights on new potential trade deals. He mentioned being briefed on approximately 24 deals nearing completion.
Hassett expressed confidence that these deals won’t disrupt markets. He also referenced positive developments in Switzerland, noting mutual respect between parties.
The UK Trade Deal
The UK trade deal is viewed as the model others aim to replicate. Hassett predicted an increase in deals similar to the UK’s in the near future.
Additionally, US President Trump insists on policies such as ‘no tax on tips’, ‘no tax on overtime’, and promoting ‘interest-free auto loans’. Market reactions included slight bids in stocks and USD/JPY.
So far, what’s been conveyed is that Hassett, speaking from the White House, has been optimistic regarding a wave of around two dozen trade agreements that are apparently approaching finalisation. From his remarks, the implication is that these agreements are unlikely to stir any sudden turbulence in market pricing. The reference to Switzerland suggests a productive diplomatic tone, one that likely reassures those watching for frictions rather than progress. His comments about the UK deal, particularly calling it a benchmark for others, underline a desire for continuity and replication in future arrangements.
The President has also reiterated a suite of tax-related proposals pointed directly at consumer incomes and affordability – things like exempting tips and overtime pay from taxation, and supporting borrowing through interest-free vehicle financing options. This signalled a general positioning toward demand support, ideally stimulating spending behaviour through a reduction in household cost burdens.
Market Reactions and Expectations
From markets, the initial takeaway was relatively restrained: steady buying into equities, along with moderate movement in USD/JPY. It wasn’t a full-scale rally, but enough to show that positioning was slightly adjusting in response.
In the near term, we may want to pay close attention to how thin liquidity conditions react to the prospect of broader trade accord announcements. They don’t need to cause immediate repricing, but they’ll lean into sentiment during hours of low volume.
If one or more of those 20-plus trade deals enters the headlines with actual numbers, we ought to see stronger directional bids as models refresh assumptions on GDP and cross-border revenue flows. In particular, market makers are likely to sharpen their hedging profiles quickly if fiscal execution begins to affect consumer channels more directly. Where OTC options markets are concerned, skew may flatten on pairs and equities most exposed to trade-sensitive sectors, particularly where tariffs have dominated pricing for the past two quarters.
Markets in the options space should also mind the endpoints of short-dated IV. There’s a decent chance that long gamma remains supported in light of ongoing policy risk. A surprise statement at an off-hour could be enough to inject temporary vol spikes into already compressed curves. Positioning ahead of US data releases will require sharper timing, particularly on days forecasted for rhetoric from administration officials. It’s not just about whether a deal happens – it’s now instruments reacting to the manner and sequencing in which details become publicly known.
Short puts on industrials, as well as dollar-linked calls on Pacific crosses, have scope for rapid re-pricing if just one of the euro-area negotiations shortcut resistance and gets formalised. Traders should remain aware of the headlines, but structurally exploit backwardation near hedging zones, especially where policy timelines are both compressed and hinge on high-frequency statements.
The preference for non-taxable income ideas, such as what’s been laid out, may see flows tilt toward consumer-driven equities. That could very well shift demand for cheap upside, particularly in sectors like discretionary retail and auto manufacturing. If that narrative sticks, premiums on three-week calls in that space will be squeezed by crowding.
We’ve already picked up on appetite building in low delta expressions for spot-following moves in high-beta banks, most of which trail policy adjustments by one or two earnings cycles. That lag can be helpful when selecting entry points, especially if the catalyst is driven by proposed taxation shifts rather than rate expectation adjustments.
Where bond proxies are concerned, muted inflation fears suggest limited upside to defensive longs in the near term. Instead, sharp exposure to credit products with currency-linked triggers could be timed against statements like the ones we’ve just seen, which hint at demand-tailored support without coordinated rate tightening.
The wider market may appear calm on the surface, but depth is still missing on many options chains. There’s more movement coming as soon as two or three of those deals actually land in final text, particularly if they affect shipping’s regulatory framework or relax holding constraints on foreign capital.
We should not pass over the signals baked into swaps either – the assumption that volatility will remain tame may not hold if something with firm metrics shows up. In trailing markets, where activity is driven by policy paths and bilateral trade revisions, timing is often more influential than even the size of the deal itself.
Better to stay pointed toward the instruments that react first – equities with tight geopolitical exposure, rates at the front of the curve, and cross-exchange currency options that flex under fiscal rotation. More deals are en route. We don’t need to guess when. Just remain aligned with where they’ll most likely hit.
