So a new week starts and there is a lot of stuff ahead of us!
The weekend saw very little change in oil prices. We are still very much caught between the cold light of weakness in global economic growth and fears of recession and the heated fears of the Iranian match in the fireworks box of the middle east.
President Trump appeared to put on a humanitarian stance by halting an attack on Iran because it might kill 150 people. My take on this was that it shows Mr Trump totally unwilling to start a forest fire that cannot be contained at this stage in his presidential campaign - but not wanting to appear weak and give Iran a wrong message. So we fabricate a picture of a “kind” president holding back his viscous,salivating dogs of war that would unhesitatingly tear Iran to bits should he release his grip on their leashes. And adding to this a “heartfelt” sigh that: Please put away your dreams of nuclear weapons and I will make you great again and I will be your best friend!
I doubt Iran is taken in by this, either…
So we have a G20 meeting, a reunion of the US/Chinese negotiating teams, a high profile meet between Mr Trump and Mr Xi Jinping, a meeting between Iran and the remaining 5 parties to the 2015 nuclear accord and then an OPEC+ meeting.
Xi Jinping has met with N. Korea’s Kim Jong Un prior to G20 and so Mr Trump also sent Kim another “love” letter which Kim described as “excellent”. At the same time, Russia has been offering to assist Iran with its oil exports and payment facilities in the light of US sanctions.
Is this just a lot of political manouvering prior to these high profile meetings - or further evidence of global power changes underway?
As I see it, Mr Trump is in dire need of some concrete results at this point. His progress with N.Korea reached a stalemate with no decisive results, he started this Iran face-off that is now at its highest point of sensitivity with no signs of a solution. He started the trade war with China which so far has only produced widespread weakened global economic growth. He has alienated and insulted at various points all the traditional US allies without any material benefit (except maybe some increased NATO contributions). His attempts to replace Venezuela’s Maduro with Guaido have so far failed to evict the incumbent president (who is supported by both Russia and China). He has alienated environmentalists throughout the world, both domestically and abroad but without any evidence that they were wrong or misguided. But the domestic stock market remains strong and the southern border is looking better protected - but is that enough in an election run-up?
This is not a political speech, it is just a scene-setter for what we might expect this week. Whilst the G20 meeting is unlikely to produce anything overly concrete, it cannot avoid discussing the twin issues of trade wars and the Middle East cauldron. Both key issues have enormous potential repercussions that could reverberate throughout the global economies for years to come. The key outcome, I think, will be who comes out of it with most credibility. The most likely names are Trump, Jinping and Putin. Afterall, the UK prime minister Theresa May is already history and the EU representatives Tusk and Junckers are ending their watches.
Europe is in turmoil and the US, China and Russia are power-hungry.
And then beyond all that, OPEC+ is yet to show its hand.
Volatility? Yes, I think so.