Friday March 17th sees the start of a 2-day meeting of the world’s top finance ministers in Germany. The fear among G20 members is the continuing US protectionism, though the recent elections in the Netherlands have indeed provided some optimism that Europe is moving towards more liberal policies. Chancellor Merkel will be meeting with President Trump today with the hope that the G20 Nations can get support for free trade and avoid getting into any trade wars with the United States. This point was raised by U.S. Treasury Secretary Munchin following a meeting in Berlin on Thursday with German Finance Minister Schaueble. Mnuchin insisted that Trump supports free trade as long as it is “fair,” stressing that countries should not manipulate their currencies, since such actions jeopardize economic growth. He also reaffirmed his support for a strong USD over the long term as being good for economic confidence in the U.S. Schaeuble commented that the U.S. & Germany agreed that, “despite all the differences”, they had to push forward in cooperating to ensure sustainable global growth and prosperity. Other G20 countries that Trump has stoked tensions with, such as China and Mexico, will also be looking for clues as to the status of their relationship with Washington. Beyond Trump’s trade-and-economic agenda, another focus of the Baden-Baden meeting will be the steps aimed at promoting sustainable global economic growth and the means of driving structural reforms forward. The finance chiefs are also to consider measures for improving the investment conditions in African countries. The Group of 20 represents two-thirds of the world’s population as well as 85% of global economic output and 80% of trade.
Friday is relatively light on economic data releases although we may see some price volatility in USD with the release of US Industrial Production at 13:15 GMT (consensus: 0.2%, previous: -0.3%) and the University of Michigan Sentiment Index release at 14:00 GMT (consensus: 97.0, previous: 96.3).