Europe's Rate Trap, Russian Doubts, Trump's Warning: Eco Day

(Bloomberg) --

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

• Europe’s unconventional experiment with negative interest rates to spur economic growth and inflation is looking like a trap
• Worrisome signals. A tide of weak reports are casting doubt on the Russian government’s optimistic economic forecasts for the second half
• Self-employment. The U.K. labor market appears to be succumbing to the jitters weighing on the wider economy
• Can do. President Donald Trump reiterated that he could impose additional tariffs on Chinese imports if he wants, after promising to hold off on more duties in a trade-war truce he reached with China’s Xi Jinping last month. Meanwhile, China’s holdings of Treasuries dipped in May to the lowest in two years amid an escalation of the trade war
• Impact spreads. Singapore’s exports plummeted in June amid a worsening trade war, spelling more bad news for the city state’s economy
• Feeling the pinch. Hong Kong is beginning to reckon with the economic cost of ongoing protests against the government’s extradition bill, as the disruption risks driving away local shoppers and deterring tourists from mainland China
• All set. Should Lesetja Kganyago announce a cut in South African interest rates this week, as expected, it won’t be because the nation’s politicians want him to
• Language similar. Fed chief Jerome Powell said the central bank is “carefully monitoring” downside risks to growth and “will act as appropriate to sustain the expansion,” reiterating concerns last week that cemented expectations for an interest-rate cut later this month
• Competing risks. As global monetary policy shifts direction, the Bank of Korea faces rising risks to economic growth but remains wary of record household debt and potential property bubbles
• Smaller hit. Japan’s economy is less likely to suffer a painful whiplash from a sales tax increase scheduled for October, early sales figures for autos and apartments suggest
• Worst downturn. How much are sanctions hurting Kim Jong Un? North Korea’s economy hasn’t been in such bad shape since his father was battling floods, droughts and a famine that some estimates say killed as much as 10% of the population

To contact the reporter on this story: Anirban Nag in Mumbai at anag8@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Karthikeyan Sundaram, Tuhin Kar

©2019 Bloomberg L.P.