The biggest event today will be a prolonged video phone call between the G7 countries as they are set to discuss coordinated efforts to fight the coronavirus epidemic and the damage it is doing to the global economy. The call will include representatives of the countries’ respective central banks, as well as finance ministers, with the United States’ Jerome Powell and Steve Mnuchin at the forefront.
Just yesterday, many of the world’s most important central banks stated they are prepared to loosen their monetary policy in order to shield their national economies from the damage caused by the Covid-19 outbreak. The virus has disrupted industrial activity, manufacturing, supply chains, tourism, and has caused a massive drop in the demand for oil.
At this point in time, investors are near-certain that the Federal Reserve will preemptively reduce interest rates in March. Even if Jerome Powell does not announce it during the G7 call, several other Federal Reserve representatives will speak today and may offer more information on if and when the cut will come.
It is also a big day for the Organization of Petroleum Exporting Countries. OPEC (together with non-member Russia) is beginning its meeting in Vienna today, where the members will discuss the current crisis with oil caused by the unexpected drop in demand due to the coronavirus.
The meeting was originally supposed to give OPEC a chance to extend its earlier agreement to cut production volumes, but now an extension might not even be enough. Many expect that OPEC+ will discuss deeper cuts to weather the storm.
