Italy Set to Help Bank, U.S.-China Talks, Shutdown Woes: Eco Day

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

  • Italy’s populist government has flagged its readiness to help cash-strapped Banca Carige SpA, approving state guarantees on any future bond issues and signaling its support for a possible precautionary recapitalization.
  • Within reach? The Trump administration expressed optimism it can reach a “reasonable” trade deal with China as President Xi Jinping dispatched one of his top aides to negotiations in Beijing.
  • Meanwhile, here are three reasons why Bank of America thinks the trade war is about to start causing some real pain for the U.S. economy.
  • Once is enough. The U.S. central bank should only raise interest rates once this year but keep going with its plan to gradually shrink the balance sheet, said Raphael Bostic, president of the Atlanta Fed.
  • Data delayed. The U.S. government shutdown has thrown some key economic measures into the dark, forcing analysts to focus on alternative data to gauge the effects of a trade war and the pace of growth in recent weeks.
  • Deflation looms. China’s producer prices are set to weaken on soft demand and lower commodity costs, adding another headwind to policy makers already struggling with trade tensions and a deteriorating growth outlook.
  • Ugly earnings. Samsung Electronics Co.’s massive earnings miss highlights the South Korean economy’s vulnerability to a slowdown in semiconductor exports.
  • Attractive again. Indonesia’s foreign exchange reserves jumped to the highest since May after the government sold $3 billion of bonds overseas and the currency rebounded.
  • Climate change. Jim Yong Kim abruptly resigned as president of the World Bank more than three years ahead of schedule, potentially sparking an international tussle over who replaces him.
  • Influential voice. Former U.S. Treasury Secretary Lawrence Summers has jumped into the debate about negative interest rates, signing onto a paper that gives the policy a damning review.

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