Fed Buckles to Markets, Trade Talks Begin, N.Z. Shrinks: Eco Day

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

• The Federal Reserve signaled it’s done raising interest rates for a while and will be flexible in reducing its bond holdings, a sweeping pivot from its bias just last month. Here’s a statement comparison
• Carl Riccadonna argues the Fed’s guidance strongly implies it’s contemplating the end of the tightening cycle. Meanwhile, Treasury announced plans to issue another record-breaking amount of debt
• The U.S. and China launched high-level trade talks in Washington with few signs Beijing will bend to demands to deepen economic reforms
• Over in southern California, warehouses are bursting with Chinese goods rushed across the Pacific ahead of President Trump’s tariff deadlines. His counterpart Xi Jinping faces a test of the iron political control he’s established as China’s economy slows
• New Zealand isn’t as popular -- or as populous -- as it’s been led to believe, new methodology for calculating immigration shows
• Japan’s top currency official indicated the country would oppose including a currency clause in any U.S. trade deal reached
• Indian Prime Minister Narendra Modi will make a last-ditch attempt to win voters with populist spending measures in Friday’s budget, putting his debt targets at risk
• First readings of Spanish, Italian and euro-area GDP are due today and we preview the releases. Meantime, Italian Premier Giuseppe Conte said the economy probably shrank last quarter, plunging Italy into a recession. Euro-area confidence extended its worst losing streak in a decade and Germany’s government added to the pain by slashing its growth forecast
• Chile raised rates by a quarter point as policy makers look past below-target inflation to expectations for strong growth and investment. Credit Suisse didn’t hold back on Mexico’s sovereign debt: agencies will downgrade its ratings, possibly more than once
• Philip Lane is poised to become the next ECB chief economist after no contenders emerged to challenge the Irishman’s claim. In Britain, the vote to leave the EU has already come at a cost regardless of where Brexit goes. Some damage is tangible, like jobs, investment and capital; some of it less so, like international clout and talent

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, Chris Bourke

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