Merkel's Retreat, More U.S. Tariffs, China Stimulus: Eco Day

(Bloomberg) -- Welcome to Tuesday, Europe. Here’s the latest news from Bloomberg Economics:

• Government forecasters handed U.K. Chancellor of the Exchequer Philip Hammond a large bag of cash last month. He decided to spend it buying votes for Prime Minister Theresa May
• Ripple effects: German Chancellor Angela Merkel is starting her retreat at home just as she’s needed more than ever by her allies abroad
• More tariffs: The U.S. is preparing to announce by early December tariffs on all remaining Chinese imports if talks next month between Donald Trump and Xi Jinping fail to ease the trade war, three people familiar with the matter said
• Stimulus: China is considering a tax cut to revive its flagging automotive market, according to people familiar with the matter, lending support to a key industry that’s been damaged by an ongoing trade war with the U.S.
  • Still on China, forecasters reduced estimates for Chinese economic growth over the coming quarters as recent government measures to counter an escalating trade war were seen as inadequate
• Record buying: The Bank of Japan is buying a record amount of exchange-traded funds as the nation’s stock market heads for its worst month since the height of the global financial crisis in 2008
• Borrowing binge: The U.S. Treasury Department said government borrowing this year will more than double from 2017 to $1.34 trillion as the Trump administration finances a rising budget deficit
• Rift widens: India’s finance minister and its central bank governor are set to meet face-to-face in New Delhi on Tuesday amid mounting tension between them over the autonomy of monetary policy makers
• Plans scrapped: Incoming Mexican President Andres Manuel Lopez Obrador, the leftist who calmed investors with his initially market-friendly approach, ditched a $13 billion airport project backed by some of the nation’s wealthiest businessmen, sparking a rout in stocks, bonds and currency
• Don’t miss the next part of Stephanie Flanders’ New Economy podcast

To contact the reporter on this story: Anirban Nag in Mumbai at anag8@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Karthikeyan Sundaram, Tuhin Kar

©2018 Bloomberg L.P.