G7 Disappoints: Futures Slide After Group Of Seven Fails To Announce New Action, Vows To Use “All Approrpiate Policy Tools”

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G7 Disappoints: Futures Slide After Group Of Seven Fails To Announce New Action, Vows To Use “All Approrpiate Policy Tools”

Less than 40 minutes after the G7 call of finance ministers and central bankers stated, the G7 issued a statement, which as Reuters warned, was a disappointment because while it vowed to use “all appropriate policy tools including fiscal measures where appropriate”, but stopped short of promising interest rate cuts or other immediate rescue measures.

The joint statement of solidarity showed that the leaders of the so-called G7 nations, which also includes Britain, Canada, France, Germany, Italy and Japan, are capable of cooperation. But the statement did not announce any of the more aggressive action that investors have been hoping for and that many economists say is needed to prevent the virus outbreak from undermining global growth.

In a statement, the group said that the G7 finance ministers and central bankers “are closely monitoring the spread of the coronavirus disease” and added, “given the potential impacts of Covid-19 on global growth, we reaffirm our commitment to use all appropriate policy tools to achieve strong, sustainable growth and safeguard against downside risks.”

The full statement is below:

U.S. Treasury Secretary Steven T. Mnuchin and Federal Reserve Chair Jerome H. Powell led a call with the G7 Finance Ministers and Central Bank Governors to discuss the coronavirus disease 2019. At the conclusion of their meeting, they issued the following joint statement:

Washington – “We, G7 Finance Ministers and Central Bank Governors, are closely monitoring the spread of the coronavirus disease 2019 (COVID-19) and its impact on markets and economic conditions.

Given the potential impacts of COVID-19 on global growth, we reaffirm our commitment to use all appropriate policy tools to achieve strong, sustainable growth and safeguard against downside risks.  Alongside strengthening efforts to expand health services, G7 finance ministers are ready to take actions, including fiscal measures where appropriate, to aid in the response to the virus and support the economy during this phase.  G7 central banks will continue to fulfill their mandates, thus supporting price stability and economic growth while maintaining the resilience of the financial system.

We welcome that the International Monetary Fund, the World Bank, and other international financial institutions stand ready to help member countries address the human tragedy and economic challenge posed by COVID-19 through the use of their available instruments to the fullest extent possible.

G7 Finance Ministers and Central Bank Governors stand ready to cooperate further on timely and effective measures.”

In response to the disappointing statement, futures immediately slumped lower approaching session lows as the key catalyst behind yesterday’s move higher has now come and gone without any actual development…

… While 10Y yields dropped to session lows.

 


Tyler Durden

Tue, 03/03/2020 – 07:48


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