G20 and Michigan Primary in Focus

This week sees Finance Ministers from across the G20 reconvene in Sao Paulo as policy makers consider growth, inflation, and interest rate pathways along with sustainability goals, squeezed supply chains and geopolitical instability.

Speaking at a press conference in Sao Paulo yesterday, the US’ Treasury Secretary Janet Yellen remarked how global economy remains resilient, in part due to strong American growth. With global growth coming in at 3.1% over 2023 and inflation falling across the board, Yellen indicated that reality had played out better than forecasts. In a nod to the notion of “when America sneezes, the world catches a cold”, Yellen suggested that the US’ avoidance of a recession helped keep the global economy on track. She caveated these sentiments however by saying that “we remain cognizant of the risks facing the global outlook and continue to carefully monitor the economic challenges in certain countries”.

This comes as Bloomberg are citing a draft communique from the G20’s closing statement which indicates that finance ministers see a greater chance of the global economy having a soft-landing.

According to the draft document, finance ministers will consider how “Inflation has receded in most economies, thanks in large part to appropriate monetary policies, the easing of supply chain bottlenecks” in addition to easing commodity prices.

Markets will be paying close attention to developments in Sao Paulo today, with a string of policy makers commenting on economic developments.

All eyes were on Michigan last night for the Democrat and Republican primary elections. Given Michigan position as a swing state, followers were seeing it as an important litmus in gauging popular opinion ahead of the Presidential Election in November. Indeed, Trump recently remarked that “We win Michigan, we win the whole thing” and it was here that he marginally won against Hillary Clinton in 2016 ahead of losing it to Biden during the 2020 election.

Back on the Primaries, President Joe Biden and Donald Trump respectively took the Democrat and Republican nominations last night. Of the votes counted thus far, Trump took 68% of the Republican vote share, well in excess of Nikki Haley who trailed behind with 27%. Trump’s victory against Haley comes just days after the former President took the Republican primary in Haley’s home state of South Carolina. Hence, while the size of Haley’s vote share is indicative of how many Republicans would prefer not to see Trump as the Republican nominee for the White House, last nights result makes it increasingly likely that Biden will face Trump on the Presidential ballot later this year.

Meanwhile, in terms of the Democrat’s ballot Biden had over 81% of the vote but 13% of votes cast were uncommitted. It is thought that many of these uncommitted votes were done in protest to Biden’s handing of the ongoing Israel-Gaza conflict. Organisers of the campaign to get people to put through an uncommitted vote on the Democrat ballot had for example said, “no ceasefire, no vote”. Since Marianne Williamson dropped out from the Democratic nomination earlier in February, Biden faced only Dean Phillips as a contestant. Focus now shifts to “Super Tuesday” on 5th March which will see 16 states hold primaries and caucuses.