Fed Debate, Pimco Eyes Currency War, China Data: Eco Day

(Bloomberg) --

Good morning Americas. Here’s the latest news and analysis from Bloomberg Economics to help get your week started:

• Federal Reserve chief Jerome Powell left it all but certain he will reduce interest rates this month for the first time in a decade. The debate among banks is now is how deep they will cut and what will they do afterward
• A full-blown currency war where major central banks and governments, including the U.S., deliberately weaken their currencies can no longer be ruled out, Pacific Investment Management Co.’s global economic adviser Joachim Fels wrote in a report
• With lawmakers on summer recess and the Bank of Canada’s latest decision in the can, attention turns to the economic numbers for signs of whether the recent momentum will continue, and what it might mean for interest rates
• China’s economy slowed to the weakest pace since quarterly data began in 1992 amid the ongoing trade standoff with the U.S., while monthly indicators provided signs that a stabilization is emerging
  • The data sent mixed signals, but overall, risks are tilted toward a slowdown in coming quarters, says Bloomberg Economics’ David Qu
• Elevated risks from protectionism, souring sentiment and a turn in the global investment cycle are likely to keep a lid on German growth in the second half, according to Bloomberg Economics
• The Bank of England’s network of eyes and ears across the U.K. is increasingly being tapped for economic clues as Brexit distorts the headline indicators
  • London house prices fell less than usual this month as sellers held back in a sign that the market may be stabilizing
  • Meanwhile, the risk of a U.K. recession is at its highest level in more than a decade, according to the Resolution Foundation

To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Brian Swint

©2019 Bloomberg L.P.