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Biggest 2022 Risks, China-U.S. Trade Spat, Japan Budget: Eco Day

Biggest 2022 Risks, China-U.S. Trade Spat, Japan Budget: Eco Day

Welcome to Thursday, Asia. Here’s the latest news and analysis from Bloomberg Economics to help you start the day:

  • The biggest risks for markets in 2022 are inflation, the coronavirus, and geopolitical tensions, according to some 700 respondents to a Markets Live Global Survey
    • U.S. consumer confidence rose in December by more than expected, suggesting some resilience in the recovery despite growing concerns about the omicron variant and elevated prices
    • The Federal Reserve signaled at its latest meeting it may raise rates quickly next year. That has left some wondering whether officials are making a policy mistake
  • When the trade deal between China and the U.S. was signed in January 2020, there was some hope that it would lead to a reduction in bilateral tensions and restore some balance to trade, but those goals are proving elusive
  • Bloomberg Economics expects China’s central bank to continue to support growth with further cuts to the RRR and interest rates next year -- but the mild signals in our dashboard suggest aggressive loosening is unlikely
  • Japan is set to unveil another record annual budget this week as Prime Minister Fumio Kishida adds to the world’s heaviest debt load with more spending ahead of an election next summer
  • Kishida’s rhetoric of distributing wealth more equally appears to signal a change of priorities for post-pandemic Japan that may run counter to plans to improve the country’s presence as an international financial hub
  • Thailand’s central bank held its benchmark interest rate unchanged for a 13th straight meeting to assess how much risk the omicron variant poses to a fragile economic recovery
  • Americans who were dreading the burden of resuming student-loan repayments in February got a reprieve from President Joe Biden, but they aren’t feeling entirely at ease yet
  • The U.K. economy has recovered from the pandemic faster than previously thought despite a downgrade to growth
  • In the months after Boris Johnson signed his post-Brexit trade deal with the European Union, the coronavirus masked the economic damage of leaving the bloc. As the pandemic drags on, the cost is becoming clearer -- and voters are noticing
  • Already famed for its unpredictability, the Bank of England could get a whole lot more inscrutable as a new tightening tool comes into play
  • The Czech Republic is poised to get another unusually large interest-rate increase as part of the central bank’s aggressive campaign to rein in spiraling inflation

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