Call to Arms, Finding FX Fair Value, New Fed Guidance: Eco Day

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

  • Global policy makers must act urgently to head off a looming solvency crisis that could cripple economies after the pandemic
  • Bloomberg Economics’ model for estimating fair value of currencies suggests the market is full of mispricings, writes David Powell
  • Fed officials will link the future of asset purchases to measures of jobs and inflation without taking any immediate action, economists say. The Treasury market’s bears may find a dose of vindication if the Fed disappoints and 10-year yields potentially jumping above 1%
  • Trade Minister Simon Birmingham says he is “deeply troubled” by reports that China has formally banned imports of Australian coal, in the latest sign the dispute between the nations is worsening
  • Japanese Prime Minister Yoshihide Suga suspended his signature domestic travel incentive system nationwide for two weeks amid record coronavirus infections and a slide in support for his cabinet
  • India’s retail inflation softened for the first time in three months
  • U.S. trade policy is getting a new guardian, writes Shawn Donnan
  • The ECB made a stark admission last week -- even three years from now, it’ll still be well short of its inflation goal of just-under 2%
  • EU debt should start showing up in national accounts so that the unprecedented joint borrowing during the pandemic doesn’t obscure government finances, Germany’s Bundesbank said
  • Germany’s latest Covid curbs are set to hit output hard just as it started to recover from the first lockdown in the spring
  • A bipartisan group of lawmakers released the legislative language for $908 billion in virus-related aid, splitting the proposal into two
  • Migrant workers in the world’s richest economies earn 12.6% less than local workers, and the gap is widening, according to the ILO
  • For decades, the attitude of unions and their advocates to increased automation could be summed up in one word: no. They feared every time a machine was slipped into the workflow, a laborer lost a job

©2020 Bloomberg L.P.

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