Fed September Cut, Hong Kong Elite, $1 Trillion Deficit: Eco Day

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

• Fed officials viewed their interest-rate cut last month as insurance against headwinds from the trade war and low inflation -- reasons that look even sharper as they move toward September. Officials took a little victory lap over their crisis bond buying
• Consensus is building across the political spectrum that the cozy relationship between property developers and Hong Kong’s rulers constitutes a threat to stability. Ever-rising real estate prices have widened the divide between the haves and have-nots
• The U.S. budget deficit is growing faster than expected -- set to widen to $1 trillion by fiscal 2020 and President Donald Trump’s trade war is weighing on the economy. Meanwhile, Trump said he’s the “chosen one” to wage a trade war with China
• Tempting as it might be to think a stronger dollar offsets higher U.S. tariffs by making Chinese imports cheaper, the IMF says otherwise. The fund is also set to remove the age-limit for its chief, paving the way for the EU-backed candidate to replace Christine Lagarde
• Indonesia’s central bank is ready to cut rates for a second time, but most economists aren’t convinced it will come as soon as Thursday
• In Asia, one surprise increase in export growth is what passes for relatively good trade news these days, writes Michelle Jamrisko in the latest edition of Terms of Trade
• Here’s a look at why Australia and New Zealand’s central banks are now pondering what until recently seemed unthinkable: QE
• The RBI’s August minutes highlighted that closing the negative output gap will now take priority, necessitating further and deeper rate cuts, writes Abhishek Gupta
• Russia and Turkey held urgent talks on connecting Turkish companies and lenders to the Russian central bank’s alternative to the SWIFT financial messaging system
• When Hayfa’s first passport as an adult woman was placed in her hands, she first carefully felt the cover and then made sure it was actually her name printed beneath the words “Kingdom of Saudi Arabia.” Then joy took over

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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