China v US at G20, CDU leader election, Thomas Cook results

Here are the top stories
we’ll be watching this week. All eyes will be on China-US
relations at the G20 summit. The contest to replace Angela
Merkel as head of the CDU in Germany hots up. And how will Brexit affect
the fortunes of UK holiday group, Thomas Cook? First, to the
summit of the Group of 20 nations in Buenos Aires,
which comes after months of trade tensions between the
presidents of the US and China, Donald Trump and Xi Jinping. The summit set to be largely an
exercise in damage limitation. Following the
catastrophic G7 summit in June, where leaders
fell out in public, Donald Trump left early,
and the leaders failed to agree a joint statement, officials around the
world have been attempting to avoid a repetition. In leaks seen by
the Financial Times leaders have reduced
their ambitions on most of the
important global issues, especially trade
and climate change, to keep the US on board. The results will be that
the G20 will drop its pledge to avoid protectionism,
difficult in any case after a year of trade
wars, and limit criticism of the president for failing
to sign up to the Paris Agreement on climate change. President Trump and Xi Jinping
will hold a bilateral summit, with the aim of
de-escalating trade tensions. The FT’s economics editor,
Chris Giles, has this analysis. The G20 summit this
week will be a real test of whether leaders can make
the world a better or a worse place. Perhaps the most
important test will be the bilateral meeting
between President Trump and President Xi
Jinping of China. If this goes well,
then the global economy could perhaps re-accelerate
in 2019 and 2020. But if we get a
breakdown in that meeting and further tariffs
between the US and China, then I think we’re looking
at a global slowdown, and maybe as much as
20, 30, 40 per cent knocked off growth in 2020, ’21. And that’s not a
pleasant prospect. Staying with the
US, on Wednesday the Federal Reserve releases
the minutes of its November meeting, when it
left rates unchanged, but signalled it was on course
for a rate rise in December. With inflation close
to target, investors will be looking for
clues on the Fed’s next move, and possible
statements on recent market turbulence. The three candidates battling to
succeed Angela Merkel as leader of the right of centre Christian
Democratic Union continue their tour of Germany. This week they will introduce
themselves to CDU members across the country in four
public hustings, the last one in the capital Berlin. The interest is huge. Organisers have
repeatedly had to hire bigger venues because of the
massive demand for tickets. Vying for Ms Merkel’s throne
are Annegret Kramp-Karrenbauer, the current CDU
secretary-general, Jens Spahn, federal health minister,
and Friedrich Merz, an old arrival of
Ms Merkel, who used to head the CDU group
in the Bundestag, before quitting politics in
2009 and switching to business. Ms Kramp-Karrenbauer
is a centrist, seen as Ms Merkel’s natural heir. But a recent poll put Mr Merz,
a conservative, clearly ahead of her. And finally, investors
will be seeing how Brexit and the weather
have affected UK holiday group Thomas Cook, which brings
out results this week. Popular for its budget holidays
to Spain, the company warned in September that profits
would fall 15 per cent and blamed unusually hot
weather in Europe, which it said had hit late bookings. Also, travellers have been
paying less for their holidays which has tightened Thomas
Cook’s margins in a fiercely competitive market. The FT’s Camilla Hodgson says
investors will be looking to see if this trend continues. A couple of things that Thomas
Cook might be worrying about, at the moment, is that
consumers in the UK have less money to
spend on holidays. And also, that travelling to
Europe after Brexit might get more expensive and
also more difficult. While Thomas Cook had a
profit warning in September, its rival, Tui, is actually
doing relatively well, and said their
sales have gone up as travellers went further
afield, to places like North America and the Caribbean. So it’s possible that having
a more diversified offering, not relying so much on budget
trips to Spain, to other bits of Europe, is what Thomas
Cook needs to be focusing on, looking ahead. One interesting part
of that strategy is own-brand brand
hotels, which is something that the company is
looking to step up, not only in Europe,
but also in China and further afield as well. And that’s where the week ahead
looks like from the Financial Times in London.

  1. Trump finally got the agreement to meet in G20 with China. He also got the letter about what can be agreed and what cannot. There is no negotiation when they meet. Trump has to accept that letter or no deal. Then, China keeps going with the trade issues. Now, the stock market is free falling. It will fall further over the next two months. China will start selling more treasury bills, and the US government cannot borrow any more money for the deficit Trump is creating. You know where we are heading. Just like Trump's 10 companies, bankruptcy.

  2. How can a country like China which holds more than 1-3 million Uyghurs and Kazakhs in Nazi style concentration camp be on high level summit, be in Argentina as if nothing happened?

  3. Western leaders are showing moral failure by not kicking out China from G-20 summit, its welcoming a country which operates 21st century concentration camps.
    Shame on them.

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