Mint Primer: World economy’s biggest week this year starts today
2 min read.Updated: 11 Jun 2018, 10:24 AM ISTLivemint
The G7 summit in Canada, the Trump-Kim summit in Singapore, a US Fed rate hike, inauguration of the 2018 FIFA World Cup and developments on the US-China trade war are all expected this week
This week will see presidential standoffs, trade tensions and central bank meetings. Each carries the potential to propel financial markets and shape the outlook for global growth after signs it slowed in the first quarter. Here’s what to watch for.
Monday: How will markets react to Trump’s G7 move?
Investors get their first opportunity to pass judgement on what happened at the summit of leaders from the Group of Seven, or G7, nations in Quebec, Canada. The gathering ended with US President Donald Trump broad-siding allies via Twitter, lashing out at Canada’s Justin Trudeau, undermining the bloc by disavowing a joint statement the US had agreed to and potentially causing fresh friction over trade.
Tuesday: Trump-Kim summit in Singapore, lawmakers in UK to discuss Brexit bill
Donald Trump and North Korean leader Kim Jong Un convene in Singapore for a summit, the first such meeting ever. Trump has predicted “great success" and said it’s possible they could sign a deal to end the Korean War. In the UK, Prime Minister Theresa May’s flagship Brexit bill returns to the lower House after a battering in the upper House, where it was amended 15 times. Ministers will be trying to overturn most of those defeats, with compromises and attempts to win rebel pro-EU lawmakers around.
Wednesday: US Federal Reserve set to raise interest rates
The US Federal Reserve is set to hike its benchmark interest rate for a second time this year. Policymakers will also publish new projections.
Thursday: Putin, Saudi prince to meet as World Cup starts
Russian President Vladimir Putin and Mohammed bin Salman, the powerful Saudi crown prince, meet at the opening game of the Fifa World Cup. The encounter could influence the global oil market given it comes a week before a crucial Opec meet. Elsewhere, the European Central Bank is shifting closer to the end of its bond-buying programme with officials set to hold the first formal talks on when and how to do it.
Friday: Bank of Japan likely to hold steady, US may release list of Chinese goods facing new tariffs
The Bank of Japan (BoJ) is likely to end the week with no tightening of monetary policy. The BoJ is still buying vast quantities of Japanese government bonds and will have been encouraged to keep doing so by data showing its still far off its 2% inflation target. Friday is also the deadline for the US to publish a final list of Chinese products subject to $50 billion in tariffs.