Fed Delays, U.S.-China Talks, Australia Negative Rates: Eco Day

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

• U.S. central bankers backed off in July from a readiness to set a clearer bar for raising interest rates, a step that would underscore their commitment to an extended period of ultra-loose policy
• The U.S. and China plan to reschedule trade-deal talks postponed from last weekend aimed at reviewing progress at the six-month mark of the agreement between the world’s two biggest economies
• Australian policy makers are yet to make a compelling case against deploying negative interest rates to help revive the economy, according to Peter Tulip, who until last week was a senior member of the central bank’s economic research department
• The U.S. announced it is suspending its extradition treaty with Hong Kong and ending reciprocal tax treatment, the latest salvo in escalating tensions between Washington and Beijing
• Hong Kong’s economy is showing emerging signs of bottoming after a recent activity-depressing run-up in Covid-19 cases gave way to a second week of declines, writes Chang Shu
• China’s financial system will need more long-term funds to stay accommodative, as banks extend more credit and the government sells bonds, writes David Qu
• The WTO is tempering hopes for a V-shaped recovery for world trade, as this chart shows
• The ECB’s efforts to keep euros flowing through the global financial system helps monetary stimulus reach the euro zone’s real economy as well as strengthening the currency’s international role, according to Executive Board members Isabel Schnabel and Fabio Panetta
• Bank Indonesia shifted its emphasis to quantitative tools, leaving interest rates unchanged on Wednesday in support of the rupiah and external stability, writes Tamara Mast Henderson
• A conspicuous silence from the Reserve Bank of India regarding support for bonds has traders wondering whether recent gains in yields are a new normal. Meantime, the RBI’s first Monetary Policy Committee completes its four-year term with a mixed record
• The World Bank is looking at ways to reduce the amount of debt owed by poor countries -- rather than simply delaying payments -- to attract more investors in the wake of the global pandemic and recession, President David Malpass said
• China warned that the massive Three Gorges Dam faced its largest-ever flood surge, as President Xi Jinping toured one of the areas hardest hit by a wave of flooding this summer

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