ECB Fresh Faces, Fed Easing Bets, ‘Big’ U.K. Trade Deal: Eco Day

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

• At least 10 of the 25 members of the European Central Bank’s Governing Council are leaving this year, possibly making it harder for investors to gauge policy
  • The ECB will probably say the first possible interest-rate hike will come later than previously indicated when officials announce policy this week, according to Oxford Economics
• U.K. retail sales declined by the most on record in May, with sluggish growth in online sales and Brexit-related uncertainty taking a toll
• France is losing its shine as a place to invest after a sharp improvement in its image with the election of Emmanuel Macron on a pro-business platform
• Donald Trump called on the U.K. to throw off the “shackles” of European Union membership and strike a free-trade deal with the U.S., as the president again weighed into domestic politics during his state visit to Britain
• The Trump administration on Monday expressed disappointment that China blames the U.S. for the failure of trade talks between the two countries
• The Federal Reserve may need to cut interest rates soon to prop up inflation and counter downside economic risks from an escalating trade war, says St. Louis Fed chief James Bullard. Investors are plowing into Treasuries on growing conviction that the Fed will cut borrowing costs this year
• With Mexico in crosshairs, Bloomberg’s global trade tracker shows fresh reasons to fret, while global manufacturing was the weakest since 2012 last month
• First trade, then technology -- now talent. The Trump administration has started taking aim at China’s best and brightest in the U.S.
• Australia’s central bank cut rates to a record low, and is expected by economists to cut again within the next three months
• South Korea’s economy contracted more than expected in the first quarter

To contact Bloomberg News staff for this story: Xiaoqing Pi in Beijing at xpi1@bloomberg.net

To contact the editors responsible for this story: Jeffrey Black at jblack25@bloomberg.net, James Mayger

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With assistance from Bloomberg