Beige Book Warning, China Cash Conundrum, New ECB Loans: Eco Day

(Bloomberg) -- Welcome to Thursday, Asia. Here’s the latest news and analysis from Bloomberg Economics to help get your day started:

  • The U.S. economy has cooled so far this year, with “slight-to-moderate” growth across most of the country, according to the Fed’s Beige Book survey. Tim Mahedy says the survey points to another strong jobs report
  • China’s increasing success at luring global investors to its stock and bond markets may be laying the seeds of future volatility. Meantime, here’s why Chinese researchers are watching the U.K.’s impending exit from the EU
  • ECB officials are poised to cut their economic forecasts by enough to justify another round of loans for banks, say people with knowledge of the matter. Jamie Murray says a downgrade makes an adjustment to interest-rate guidance inevitable
  • The OECD says the global economy is suffering more than expected from trade and political tensions which are clouding prospects
  • The U.S. trade deficit widened to a 10-year high of $621 billion, bucking President Donald Trump’s pledges to reduce it. Trump is pushing negotiators to close a trade deal with China, concerned he needs a big win in advance of his re-election campaign
  • Meantime, the winners and losers from the U.S.-China trade war stretch from coast to coast
  • The Fed can afford to “wait” and watch incoming data before making another monetary policy move, said New York chief John Williams. It may also be close to a level of reserves in the banking system needed to keep the federal funds rate about even with its interest-on-reserve rate. Here’s a summary of recent remarks by Fed policy makers
  • The Bank of Canada diluted its conviction that rates will need to go higher as officials express greater uncertainty about the outlook. Tim Mahedy says Canada’s pause is here to stay as policy makers turn dovish
  • Down in Australia, strategists are starting to catch up with traders who’ve been steadily increasing bets on monetary easing by the RBA

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