China-U.S. Talks, Draghi Faces Pushback, Sweden Rates: Eco Day

(Bloomberg) --

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

• China and the U.S. announced that face-to-face negotiations aimed at ending their tariff war will be held in Washington in the coming weeks, as mistrust remains
• Meantime, China’s cabinet signaled that a reduction in the amount of funds banks have to hold in reserve is on the way. David Qu writes; “Get ready for the People’s Bank of China to cut the required reserve ratio”
• Hold off. Mario Draghi’s bid to reactivate bond purchases in a final salvo of stimulus is being threatened by the biggest pushback on policy ever seen during his eight-year reign as European Central Bank president
• Cast down. Boris Johnson was humiliated by Parliament for a second day running, with his do-or-die Brexit strategy derailed and even his plan for a general election rejected
• Losing steam. Swiss economic growth slowed in the second quarter, with investment suffering amid fallout from the trade war and a slump in neighboring Germany
• Hard times. German factory orders fell in July, aggravating an industrial slump that has pushed Europe’s largest economy to the brink of recession
• Put on hold. Sweden’s central bank is anticipated to ditch its plan to exit negative interest rates this year in response to mounting evidence of a slowdown in the global and domestic economy
• Unconventional moves. As global central banks swing back into easing mode, old tools long frowned upon by monetary purists are being embraced to ensure cash goes where it’s needed
• Federal Reserve officials are weighing two competing forces in the U.S. economy: the resilience of the consumer versus the fallout from uncertainty around trade disputes and weaker global growth

To contact the reporter on this story: Jiyeun Lee in Hong Kong at jlee1029@bloomberg.net

To contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, Karthikeyan Sundaram, Devidutta Tripathy

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