European Inflation, Brexit Divisions, Trade War Sets In: Eco Day

(Bloomberg) -- Welcome to Tuesday, Europe. Here’s the latest news from Bloomberg Economics:

  • Mario Draghi sees a "relatively vigorous" pick up in underlying inflation; that’s lead economists to wonder if he’s building a case to raise interest rates late next year
  • Draghi also insisted that populist rhetoric by Italy’s new government has been driving up borrowing costs for households and companies, even before the cabinet approves its first budget law
  • German Chancellor Angela Merkel warned EU leaders against taking an excessively harsh line over Brexit -- but French President Emmanuel Macron turned up the heat; meanwhile the Labour Party is preparing to vote down any deal that Theresa May brings to Parliament
  • Tom Orlik weighs who has the most leverage as China and the U.S. dig in for what could be a long and bruising trade war
  • Trump and his South Korean counterpart signed a renegotiated free-trade agreement, marking the first time the U.S. president has finalized a major trade deal since entering office. Meantime, at the UN, leaders from Latin America, Africa and Asia expressed concerns about rising tensions between the world’s two largest economies
  • The Federal Reserve will raise interest rates this week and continue its quarterly drumbeat of 25-basis-point increases straight through July 2019, according to a Bloomberg survey
  • Indonesia is ramping up efforts to shield the rupiah from a global rout that’s rattling emerging markets

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