10th July 2017

Tension Surrounds G20 Summit

This week all the focus has been on the G20 summit that is taking place in Germany.

Most of the press coverage has been on what Trump might do; the president is firmly in the bad books of China and Germany, who look set to become the international community’s new foster parents. Additionally, the global get together will give him his first chance as president to meet Vladimir Putin, which will be nice. While the press is keen on seeing a train wreck unfold, there are the serious issues of diffusing a possible trade war and dealing with North Korea that the meeting offers a chance to respond to.

Elsewhere rate speculation is really heating up, with bond markets down about one per cent over the week. Mario Draghi kicked things off with claims that the ECB has beaten deflation, the MPC minutes showed rate hawks in the ascendency at the Bank of England and the US Federal Reserve began discussing how it’s going to start unwinding its massive balance sheet after years of QE. While the end of low rates and easy money has been unsuccessfully called many times before, just maybe this time is different. We wait to be convinced.

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