The week ahead: G20 meeting in sharp focus
A sense of caution is expected to sweep across financial markets in the week ahead as investors tussle with trade dispute fears, Brexit-related uncertainty, Italy budget woes and depressed Oil prices.
Global equity and currency markets are poised to be heavily impacted by geopolitical developments with the G20 meeting in sharp focus. The Dollar has the potential to rebound amid expectations of higher US interest rates and safe-haven demand.
In the United Kingdom, Sterling’s outlook will depend on how investors continue to interpret the draft Brexit withdrawal agreement. The trajectory for Oil prices in the short to medium term points to further downside on the back of rising global supplies and signs of slowing demand.
The G20 summit at the end of November will be the main focus across markets, with investors closely monitoring the summit to see whether US-China trade tensions will be resolved. Although a breakthrough deal is highly unlikely, any signs of both sides willing to talk further could ease trade tension fears.
In the United States, there will be a special focus on the second estimate GDP growth rate for Q3 on Wednesday. Expectations over the Fed raising rates further in 2019 are likely to heighten if GDP figures beat expectation and the latest FOMC meeting minutes are more hawkish than expected.