World leaders descend on Hamburg for tense G20 summit

Hamburg is bracing itself for the arrival of leaders from the world’s biggest economies this weekend, with the G20 summit rolling into town at a fragile point in the global geopolitical climate.

Beginning with the shock result of last year’s Brexit referendum little over a year ago and culminating in a widely-unexpected victory for Donald Trump in the US presidential election, the power plates have shifted significantly in recent months as the world’s most influential politicians gather to discuss the economy, security and environmental issues affecting the globe today.

German chancellor and party host Angela Merkel has maintained a hard-line in recent weeks and vowed to place climate change issues at the top of the agenda, despite Trump having withdrawn the US from the Paris climate accord in May.

Merkel said last week that "anyone who believes that the problems of this world can be solved with isolationism and protectionism is making a terrible error", setting up a potential showdown with her US counterpart at the summit.

With Trump and Theresa May leading governments intent on pursuing policies with a distinctly isolationist feel, EU leaders in particular will be keen to present a strong case for increased cooperation on all fronts.

Trump has received a frosty reception from several other world leaders so far in other meetings, as many question the ability of Washington to maintain its status as the pre-eminent global power.

RUSSIA ALLEGATIONS

And what of Vladimir Putin? As accusation after accusation mounts of the Kremlin’s attempts to stamp its influence on the aforementioned election, and the alleged links between the Trump campaign and Russian officials, the premiers of the two former Cold War combatants will officially meet for the first time on Friday.

Conflicts involving the likes of Syria, North Korea and Ukraine are likely to be among the hot topics discussed by the 20-strong group during the weekend, as investors keep a keen eye on events to provide clues as to how markets will react in the days and weeks ahead.

Chris Beauchamp, chief market analyst at IG, said markets were being held back by ongoing tensions as the world leaders converge on Hamburg.

Beauchamp said: “Geopolitical tensions, oil volatility and Brexit negotiations are all conspiring to keep markets on the back foot this morning.

"The G20 meeting and Donald Trump’s visit to Poland flag up the many problems besetting global leaders, from Russia via Saudi Arabia/Qatar, Syria and finally on to North Korea. The world seems to be at loggerheads, and this flow of negativity means that bullish sentiment is being held firmly in check."