Today, Friday (28/6) and tomorrow, Saturday (29/6), the Group of 20 (20 countries with the biggest economies) will hold its annual summit in southern Japanese city of Osaka, Japan. The biggest topics at hand include the ongoing international trade tensions that has threatened an expected pick-up in economic growth this year and in 2020, especially since President Donald Trump of USA has said that he will talk with Xi Jinping, President of China about the ongoing trade conflict. Finance ministers and central bank governors of the 20 countries, are meeting to discuss the global economy amid rising trade tensions between China and the United States. The G20 summit is considered very important as it provides a forum for world leaders to talk about pressing global economic and political concerns. A Japanese finance ministry official who attended Saturday’s G20 session told reporters that most of the group’s members voiced concern that escalating trade tensions posed a huge downside risk for the global economy.
As the summit and the long awaited Trump & Xi Jinping meeting looms, stock market performance were mostly weakened as investors awaited developments on the trade frictions between US and China. Japan’s Nikkei NIK, -0.29% fell 0.8% and Hong Kong’s Hang Seng Index HSI, -0.28% retreated 1.3%. The Shanghai Composite SHCOMP, -0.60%. Furthermore, the American based S&P 500 Index also fell per Wednesday (26/6).
Moreover, the situation worsened due to opinion differences from FED chairman, Jerome Powell and FED President, James Bullard. While James Bullard would like to directly cut the rates by quarter-point, Jerome Powell agreed to hold rates steady and cut it to 50 basis points in July. This difference of opinion dampens investors hope. The decision is now leaning towards the G20 under the leadership of Jerome Powell. The FED agreed to hold rates steady and cut it to 50 basis points in July. This decision is expected to bring peace among the G20 nations and a meeting between Trump and Xi Jinping can hopefully bring a better economic climate so that capital market performance can be improved globally.
Sources:
Japan Times
CNN
CNBC Indonesia
Market Watch
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