China Dodges FX Tag, Sentiment Slumps, RBA Seen at 0.5%: Eco Day

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

• The Trump administration again refrained from labeling China a currency manipulator, a decision that leaves a campaign promise unfulfilled but avoids further escalation in the trade war
• China’s economic outlook deteriorated this month, after April’s weaker-than-expected performance combined with the renewed trade dispute to hit confidence. This graphic illustrates the weakening
• The RBA’s signal it expects to lower rates this year is setting off a fresh round of forecasts for deeper policy cuts as economists ponder where the lower bound’s level lies
• Singapore leapfrogged Hong Kong and the U.S. to become the world’s most competitive economy for the first time in nine years
• China’s economy, and the region more broadly, will be hit hard if the escalating trade war turns into a long, drawn-out ordeal, writes Chang Shu. Meanwhile, Beijing accused Washington of abusing a national security exception at the WTO by cutting off Huawei
• New Zealand’s annual budget has been thrown into disarray after the opposition National Party released parts of it early and the Treasury Department said its computer systems had been hacked
• Less than two years after winning a landslide election, Japanese Prime Minister Shinzo Abe’s party is considering an early vote before the economy takes a hit from a planned sales tax hike in October
• Thailand still doesn’t have a new government in place following March’s divisive election, and the delay is pushing out the timeline for big infrastructure projects just as the economy slows
• A group of insiders in Canada’s ruling Liberal Party has discussed the possibility that BOE chief Mark Carney could replace Prime Minister Justin Trudeau as leader, the Toronto Star reported. Meanwhile, Bank of Canada Governor Stephen Poloz will probably keep rates unchanged Wednesday in what looks to be a prolonged hiatus
• Angela Merkel has given up on her heir apparent and hunkering down in office in the face of growing turmoil in Germany’s ruling party

To contact the reporter on this story: Michael Heath in Sydney at mheath1@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Henry Hoenig

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