Insights 
VT 
Donald Trump acknowledged Canada’s removal of retaliatory tariffs with positive remarks, noting an imminent call with Prime Minister Carney. He indicated a desire for constructive relations, following a productive discussion the day before.
Addressing Russia, Trump mentioned President Putin might attend the World Cup and showed dissatisfaction over the recent pipeline attack. He stated that developments concerning Russia and Ukraine would become clearer within two weeks.
Contrasting Attitudes Towards Russia
Trump’s comments revealed contrasting attitudes: expressing interest in hosting Putin, which would need substantial American security, while simultaneously referring to the Russian leader in a welcoming tone. Economically, Trump maintained sanctions on Russian oil to pressure Moscow toward peace, yet expressed criticism over pipeline disruptions, even though such infrastructure is repairable.
Military intensification by Russia continues, raising concerns over harm to civilians despite the damaged pipeline.
Regarding economic decisions, Trump referenced Powell’s monetary actions, deeming them delayed. Powell had implemented three rate cuts of 50 basis points each during the preceding months, aiming to address economic challenges before and after the presidential election period.
The improving relationship with Canada suggests a period of lower volatility for cross-border assets. We saw the Canadian dollar strengthen against the U.S. dollar in late 2024 after these retaliatory tariffs were removed, and with trade tensions easing, options on currency ETFs may see decreased implied volatility. This stability could make directional bets on companies with heavy Canadian-American supply chains less risky.
Geopolitical Concerns And Market Volatility
The situation with Russia presents a clear signal for a spike in market volatility over the next two weeks. The direct mention of a two-week timeline to determine the direction of the conflict is a rare and explicit warning for traders. We already saw West Texas Intermediate crude futures jump over 4% on the news of the pipeline strike, showing how sensitive energy markets are to these events.
This level of geopolitical uncertainty makes trading the CBOE Volatility Index, or VIX, a primary focus. Looking back, we saw the VIX surge above 35 during the initial escalation of the conflict in 2022, and a similar move could happen if the situation deteriorates in early September 2025. Using options strategies like straddles on major indices or energy ETFs could be a way to trade the expected price swing without betting on a specific direction.
The backdrop to all of this is a Federal Reserve that is seen as reactive. The rate cuts from September, November, and December of last year are now history, and the market is grappling with whether that was enough to steady the economy. With the latest July 2025 CPI data showing inflation remains sticky above 3%, any hint of further slowing in the upcoming jobs report could force the Fed’s hand and create sharp moves in interest rate futures.
