Call Me, Maybe? Global Economy Aims to Endure Trade-Deal Delays
Central Banks Help Economies Suffering Through Trade-Deal Delays
(Bloomberg) --
Amid more signs that China’s digging in for prolonged trade sparring with the U.S., governments are stepping up stimulus efforts alongside burdened central bers.
Here’s our weekly wrap of what’s going on in the world economy.
The Trade War Called
It might be easy to play the long game as an ancient civilization against a young republic, and China is increasingly pushing at least a veneer of patience while President Donald Trump keeps up his trademark unpredictability. From the weekend’s tough talk to a murky declaration that “China called” to make a deal, Trump’s tactics are moving further from China’s. That’s slimming the chances for agreement on the issues, our Washington team writes. The U.S. side says there will be a China meeting, but won’t say when.
One big question that remains: whether Trump will employ what he says is the power to restrict U.S. companies from operating in China. Toymakers are already feeling the burn as they look toward Christmas. China early indicators are down, and German and Hong Kong exports add to the sour data.
In brighter trade news, the U.S. and Japan say they have come to terms on a new pact.
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...And Central Banks Picked Up
Central banks retain the spotlight as the primary economic stabilizers right now, but they’re increasingly being joined by governments that are trickling out fiscal support -- especially across Asia. The Reserve Bank of India shifted $24 billion to the government, setting up more options to avert a slowdown.
That sort of coordination is much-needed at a time when Ray Dalio joins a chorus that’s warning about how central bankers have very little power to play the saviors again. And a former Fed official’s op-ed fanned fears that central banks are at risk of being over-politicized.
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Tipping Points
Count the Federal Reserve’s Mary Daly among those calling for calm as U.S. data present a more solid picture than the business sentiment suggests. American consumers are still buoyant about their labor market, even if their counterparts in places like South Korea are far more dour.
More potential tipping points to watch: a brutal shipments figure in an otherwise steady U.S. business equipment report, fast-maturing foreign debt in Chinese companies, and how oil prices are handling it all.
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Weekend Reading
Chart of the Week
700K Data Points Reveal China’s Trade War Edge
To contact the reporter on this story: Michelle Jamrisko in Singapore at mjamrisko@bloomberg.net
To contact the editors responsible for this story: Simon Kennedy at skennedy4@bloomberg.net, Zoe Schneeweiss, Fergal O'Brien
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