Hong Kong Highwire Act, Carney Hits Back, U.S. CPI Miss: Eco Day

(Bloomberg) -- Happy Friday, Asia. Here’s news from Bloomberg Economics to help get your day started:

• What goes up, MUST come down. Hong Kong’s economy just keeps on defying gravity -- but for how long?
• Bank of England chief Mark Carney hit back at accusations of poor communication after keeping interest rates unchanged, saying financial markets aren’t his only audience. Marcus Ashworth asks whether what you read or what you hear is more important in the wake of Carney trying to put a hawkish spin on the U.K.’s policy outlook. The BOE governor’s window to tighten before Brexit hits is also closing
• The Fed can relax. U.S. inflation took a breather in April from its recent acceleration, easing pressure on policy makers to consider a faster pace of rate hikes; indeed, remove housing and the picture weakens further. Carl Riccadonna says the data underscores the Fed’s “sanguine tone” on inflation risks
• The U.S. extended a public hearing on the Trump administration’s proposed tariffs on $50 billion of Chinese goods as the sides continue talking to avoid a trade war. Hal Brands thinks Trump is right on China, but is pursuing a misguided response with tariffs
• BOAML is sticking to its contrarian view of an India rate cut despite policy makers talking about a possible hikes amid stubbornly sticky inflation. Prime Minister Narendra Modi will likely defy sanctions on Iran and seek favorable oil-price terms to ease inflation pressure ahead of next year’s general election, BI reckons
• Budget bonanza. The U.S. posted its largest monthly surplus on record in April, which the Congressional Budget Office said reflected stronger economic activity
• Christine Lagarde said the IMF is seeking a rapid resolution for talks with Argentina over a credit line to restore confidence in the economy
• Prague’s policy pioneers. The Czech Republic is back on investors’ radar as a prime candidate for another rate increase to add to three between August and February
• Emerging markets are under the gun as this analysis of events in the world economy this week shows

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, James Mayger

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