Risk off flows after G20 meeting

There is early risk off sentiment with the JPY moving higher and the AUD and NZD after the G20 meeting over the weekend cited officials suggesting that governments may have to consider coordinated fiscal stimulus if global growth doesn't rebound.

From the G20:

  • See downside risk to global growth persisting as the coronavirus raises uncertainty and disrupts supply chains
  • final communiqué said they would enhance risk monitoring
  • agreed to be ready to intervene with the necessary policies related to risks
  • Saudi's finance minister Mohammad Al Jadaan said after the meeting that "global economic growth is continuing but remains a slow and downside risk persists including those arising from geopolitical, remaining trade tensions, as well as policy uncertainty"
  • IMF's Georgieva says they have cut the forecast for Chinese grow to 5.6% from 6%. They trimmed global growth by 0.1 percentage point.
  • The G20 members called for Germany to increase spending
  • Fiscal policy should be flexible in growth friendly while ensuring debt as a share of GDP is on a sustainable path
  • Monetary policy should continue to support economic activity and ensure price stability, consistent with central banks mandates dollars
  • there were no breakthroughs on efforts to introduce a global minimum tax or tax system for multinational tech giants.
  • U.S. Treasury Sec. Mnuchin called on global counterparties to step back and focus on global minimum tax for which he said there was a broad agreement. He said that the US has been consistent in stating that the digital services tax would be discriminatory to US companies