The G20 summit in Osaka (Japan) commenced on Friday 28 June 2019 and ended on Saturday 29 June 2019. This year’s G20 summit was focused around global trade, economic and environmental issues.
The main focus for companies and investors was trade talks between President Trump (United States) and President Xi Jinging (China). Both leaders agreed to halt further increases on tariffs, and agreed to begin a new round of trade talks. This is a positive for companies trading internationally and investors, with the hope that the US and China can come to a trade agreement and end the ongoing trade war.
The largest takeaway from the G20 was the EU (European Union) and the MERCOSUR (South America trade block) signed a trade agreement that will aim to reduce tariffs and increase trade between both regions.
The summit objectives and outcomes look to positively affect the global economy and Australia’s position in it. Australia is a small open trading economy and strongly benefits from a global effort to reduce trade barriers and increase trade flows of goods and services. With a new hope for a close to the US and China trade war, Australian companies and investors should be more optimistic than before the G20 summit.
The market today is up, remaining at around an all-time high since pre GFC levels, suggesting Australian equity market’s reaction to the G20 summit is slightly favourable.
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