France-U.S. Tax Truce, IMF Outlook, Japan Policy Hold: Eco Day

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Welcome to Tuesday, Europe. Here’s the latest news and analysis from Bloomberg Economics to help you start the day:

• Presidents Emmanuel Macron and Donald Trump agreed to a truce in their dispute over digital taxes that will mean neither France nor the U.S. will impose punitive tariffs this year, a French diplomat said
• The International Monetary Fund predicted the world economy will strengthen in 2020, though at a slightly weaker pace than previously forecast amid a clouded outlook for India, and threats related to trade and tensions in the Middle East
• Investors wondering whether the Bank of England will cut interest rates next week are missing one potentially vital bit of insight that policy makers are keeping under wraps -- reports from BOE agents
• Four days after Turkey’s official borrowing costs fell below zero when adjusted for inflation, Treasury and Finance Minister Berat Albayrak said the nominal interest rate “matters more” and suggested the country’s currency should be at a more favorable level
• The Bank of Japan left policy unchanged Thursday and painted a brighter picture of the economic outlook, a further signal that the need for additional stimulus has receded
• Expanding Chinese imports from the U.S. under the recently signed trade deal won’t affect demand for goods from other nations, a Chinese trade official told reporters
• Moody’s downgraded Hong Kong’s rating as a long-term issuer of debt by one notch, just months after Fitch Ratings took a similar action amid political protests
• Early South Korean trade figures for January show the country’s chip exports may be headed for the first monthly gain since late 2018, another sign that a recovery in global manufacturing is gaining steam
• India needs an inflation-target overhaul, according to Bloomberg Economics analysis; ahead of India’s budget announcement Feb. 1, here’s a look at how the expected winners for last year’s fiscal plan fared

To contact the reporter on this story: Michelle Jamrisko in Singapore at mjamrisko@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Michael S. Arnold

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