Trump, Putin and other world leaders gather in Hamburg for G20 summit

Courtney Goldsmith
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Trump and Putin will meet for the first time (Source: Getty)

World leaders will gather in Germany today for a potentially fractious two-day summit in Hamburg between 20 of the world’s leading economies.

Political leaders will gather in the north German port city at the G20 summit to discuss traditional issues relating to the global economy, trade, financial market regulations and fiscal policy. As host, German Chancellor Angela Merkel will also draw attention to migration and climate change.

However, all eyes will be on US President Donald Trump, who will meet Russian President Vladimir Putin for the first time on the global stage. Trump, who came into office looking to establish positive relations with Russia, just today criticised Putin in his harshest words yet during a brief visit in Poland.

“Trump has previously expressed admiration for Putin as a leader and hasn’t been shy in declaring he’d like to strengthen relations between the US and Russia, so Friday’s meeting could be a key indicator as to how their relationship will develop in the future," said Dennis de Jong, managing director at broker UFX.

Read more: Carney calls on G20 leaders to continue the push for banking reform

Hamburg is known as a beacon of free trade, and Merkel has made that one of the key themes of the summit, which could highlight differences in Trump's protectionist policies.

Prime Minister Theresa May, alternatively, has highlighted the UK's position as a powerful advocate for free trade and a global economy that works for everyone ahead of the G20 summit.

However, Anne Van Praagh at Moody's said the risk to global trade and economic growth from America's pursuit of protectionist policies has seemed to diminish for now.

“The US administration has backed away from accusing some of its biggest trading partners of unfair practices or currency manipulation, and is now in the process of renegotiating Nafta, rather than withdrawing completely.”

“This more measured approach on the trade front from the US administration has fueled expectations that the global economic recovery will persist.”

Read more: May calls for a global economy that works for everyone ahead of G20 summit

With stock markets unsteady before global leaders meet tomorrow, investors are holding their breath while they wait for developments.

"The G20 meeting and Donald Trump’s visit to Poland flag up the many problems besetting global leaders," said Chris Beauchamp chief market analyst at IG.

"The world seems to be at loggerheads, and this flow of negativity means that bullish sentiment is being held firmly in check."

Trump's bullish nature often causes fluctuations in foreign markets, but stability is the aim of the summit, de Jong said.

“While Trump will be keen to hold the cards at the table and see US markets going from strength to strength in the aftermath of the summit, the G20’s most important task at hand is to maintain global financial stability. It could be a nervy wait for financial markets to see if any kneejerk reactions follow from the G20 summit," de Jong said.

Read more: Trump jets to Poland today ahead of the G20 summit

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