China's market turmoil and warnings of global risks to the economy are the biggest challenges facing the G20 as it meets in Ankara. Ministers are split on the implications of a Fed rate hike, but call for all concerned to prevent competitive devaluation of currencies. David Pollard reports.
Few agreements were expected from the G20 summit. More so after an apparent split over the US Fed. Ministers from emerging market countries demanded recognition of a possible US rate hike as a global risk. That demand, though, rejected from the final communiqué. All while the prospect of a hike itself was under examination - after headline US non-farm payrolls data came in below forecasts. Though with the US jobless rate still dropping to a seven-year low, perhaps not low enough to force an about-turn at the Fed. IG's Alastair McCaig. (SOUNDBITE) (English) ALASTAIR MCCAIG, MARKET ANALYST, IG SAYING: ''They will start the ball rolling this year ... It doesn't necessarily have to be 25 basis points, it could be less, but you do feel they want to get something in place before the turn of the year.'' German finance minister Wolfgang Schaueble gave a nod of approval to Beijing's desire to have its currency included in an IMF currency basket. But just weeks after China devalued its currency, G20 ministers were also pressing it to do more to tackle its slowdown crisis. And agreed for all concerned should prevent the breakout of a currency war. Though China's own follow-through on that is possibly in doubt, says McCaig. (SOUNDBITE) (English) ALASTAIR MCCAIG, MARKET ANALYST, IG SAYING: ''They've got quite a few battles on their hands as far as the financial arena is concerned. It's unlikely they'll want to give away some of their powers and room for manoeuvrability.'' The slump in emerging market stocks and currencies has reached "crisis proportions", according to the Institute of International Finance. And with an inconclusive US jobs report, markets everywhere could face another dose of what they fear most. Uncertainty.