Danish Rates, Powell Test, Sweden-Size Economy Shut: Eco Day

(Bloomberg) --

Welcome to Monday, Europe. Here’s the latest news and analysis from Bloomberg Economics to help get your week started:

• Economists at some of the biggest Nordic banks say Denmark, which pegs the krone to the euro, is likely to raise its key rate in the coming months. Not long ago, they thought a cut was more likely, which would have seen Denmark wading into a monetary no-man’s land
• Federal Reserve Chairman Jerome Powell has confessed that it’s “very hard” to understand China’s economy and the outbreak of the coronavirus has made that exponefintially more difficult
• China’s Hubei province is now in the third week of a shutdown triggered by the virus that has killed hundreds of people -- and halted an industrial powerhouse the size of Sweden
• Stable employment -- a top priority for China -- is under threat from the virus outbreak. The damage will determine the intensity of stimulus, writes Chang Shu, chief Asia economist at Bloomberg Economics. Chinese travel over the Spring Festival period declined 40% from a year earlier, the transport ministry said
• It’s a mad scramble for the best data: Economists are grappling with ways to gauge the real-time impact of the coronavirus on the world economy, even as the outbreak continues to confound forecasters
• Reductions in the U.S. corporate-tax rate in 2018 didn’t result in much more investment, said former U.S. Treasury Secretary Larry Summers, who is concerned about the economy running into “financial trouble”

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