What Could Be Market Moving From The G7 Meeting?

g7

When the leaders of the seven countries that represent 46% of the global GDP get together to negotiate policies and issue statements on trade, it’s inevitable that there will be some impact on the markets.

Some of it might be right away, some overtime. This time, we are expecting the meeting to conclude after the markets have closed in most of the world. Therefore, any immediate impact will probably happen over the weekend.

On the other hand, not everything coming out of the meeting is likely to be a surprise. In fact, most of the meetings of the leaders are protocol and will merely formalize what has already been discussed at lower levels and in the run-up meetings.

Perhaps the most salient agreement from the meeting is the global corporate tax proposal. But we already knew about that having been agreed on earlier on in the week.

So, what’s pending?

Most of the agreement is already out there

On Wednesday night (or early Thursday, depending on where you are in the world) a draft of the potential final communique was released.

These meetings typically don’t lead to ‘accords’, because that requires the consent of the country’s respective parliaments. So, they generally produce a “non-binding” memo. From that draft, we can get a pretty good idea of what will be the conclusion from the meeting.

Most of the attention will be on Covid. The media is likely to focus on issues such as the promise to deliver 1B doses to poor countries. And, more controversially, we can expect the media to demand a more thorough investigation into the origins of the pandemic. In fact, the EU’s von der Leyen stressed that in a speech yesterday.

Another factor that we initially anticipated to be discussed was the pending fishing issue between the UK and France (or, effectively, the EU). However, they resolved this before the meeting started.

This was an important step in dealing with tensions between the UK and the EU over the Northern Ireland Protocol. That said, the forum itself isn’t a venue for dealing with that particular issue.

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