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High Stakes at the G20 Summit - EMEA Brief 30 Nov

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JoeIG

  • The G20 summit in Argentina begins today, where discussions around trade, Brexit, and tensions between Russia and Ukraine are expected to be the dominant topics to take centre-stage. 
  • FOMC minutes released yesterday pointed towards another rate hike in December, with concerns that trade tensions and corporate debt could impact growth.
  • China’s official PMI fell to 50.0 in November from 50.2 last month, adding pressure on the country to implement more economic support measures amid the trade war.
  • The Dow Jones fell 0.11% on Thursday, whilst the S&P 500 and the Nasdaq Composite dropped 0.22% and 0.25%, respectively.
  • MSCI's index of Asia-Pacific shares outside Japan was last up 0.1%, making a 2.7% gain for the week and reflecting a rebound from the recent sell-off. The Nikkei was up 0.4%.
  • USD fell 0.07% against the yen to 113.39.
  • Pakistani Rupee plunges 6% in a suspected devaluation of the currency by its central bank, amidst ongoing bailout talks with the IMF. 
  • US Crude rises 2.3%, settling at $51.45 yesterday as Russia is expected to accept OPEC’s decision in the need to cut oil production. Oil producers are expected to meet in Vienna next week to discuss supply cuts.
  • Gold is currently trading at $1,224.34 an ounce.

UK, US and Europe: The G20 summit begins today in Buenos Aires, Argentina. The outcome of which has become increasingly more significant due to recent weeks for a few reasons. Firstly, Donald Trump and Xi Jinping are expected to discuss trade this weekend, a meeting that will be watched very closely for clues on the path of the ongoing tensions between the US and China, after repetitive duty and tariff increases have amounted to a total of $360 billion across both sides. The escalation between the world's two largest economies has been a major threat to the global economy, the upcoming meeting will attribute to whether the world calms its nerves or continues on edge. Then there is Brexit, where Theresa May has the chance to secure international backing for as she attempts to sell her Brexit deal to world leaders at G20. Finally, amid heightening tensions and the flare-up of exchanges between Russia and Ukraine, Trump has cancelled a planned meeting with Putin, blaming specifically on Russia's failure to return ships and sailors seized from Ukraine last week in the Black Sea. 

Oil prices have rebounded to par some of the steep losses in recent weeks, as confidence returned in the commodity on the back of expectations that Russia will co-operate with OPEC next week in Vienna, where the oil cartel and non-OPEC countries are to formulate an agreement on a supply cut that will stabilise crude prices. After hitting a four-year high at the beginning of October, the commodity has tumbled around 30% as sanctions against Iran's supply has proved to be less impactful than expected and concerns over a slowing global economy has curbed demand. Watch the IGTV featured video below, where industry advisor Malcolm Graham-Wood and Spencer Welch, director of oil markets at IHS Markit, discuss the future of the oil market.

Economic calendar - key events and forecast (times in GMT)

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Source: Daily FX Economic Calendar

Corporate News, Upgrades and Downgrades

  • Volkswagen and Tesco to build UK's largest free car-charging network, funding as many as 2,500 electric car charging bays.
  • Unilever has announced that Alan Jope will take over the helm from former CEO Paul Polman.
  • Deutsche Bank's offices in Frankfurt were raided by police yesterday over alleged claims of money laundering. Shares fell 3% on the back of the news.
  • Nio, one of the main Chinese electric car-makers and rival to Tesla, has announced that its U.S. head will step down.
  • Audi has unveiled a concept electric sedan car that is expected to challenge the Tesla Model S and to be in full production by late 2020.
  • Autonomy's co-founder and CEO, Mike Lynch, has been charged with defrauding shareholders in the sale of the company for $11bn to HP back in 2011.

IGTV featured video

Information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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