New Trade Deal, China at Crossroads, RBI’s Easing Scope: Eco Day

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

• The U.S. wants to start work soon on a trade deal with the U.K. after recently closing agreements with Mexico and Canada and with China
• The pickup in China’s economy in November adds further optimism to the growth outlook as industrial output and retail both beat expectations. But Chang Shu does not see this as the end of bad news about the Chinese economy
• India’s central bank Governor Shaktikanta Das said there’s more room to ease monetary policy, but it depends on how such actions are timed
• U.K. Prime Minister Boris Johnson announced his first cabinet appointments, signaling a desire for continuity as he focuses on leaving the EU on Jan. 31. But he faces a challenge to keep to his fiscal rules as billions are added to the budget deficit
• Prime Minister Justin Trudeau’s fiscal update Monday was so stained with red ink that it may increase pressure on the Bank of Canada to act in the event of a downturn
• The Bank of England’s policy doves look unlikely to be blown off course by Johnson’s election victory, with most analysts expecting two officials to repeat their calls for lower rates
• U.S. homebuilder sentiment advanced in December to the highest level since 1999 amid stronger sales and a surge in prospective buyer foot traffic. Manufacturers in New York state are also growing more upbeat about the demand outlook
• U.K. manufacturing production suffered its worst month in more than seven years in December, increasing the chances that the economy as a whole will contract this quarter
• About $5 billion has been pulled from investment funds in Hong Kong amid escalating political protests, according to the Bank of England. This comes as Hong Kong authorities have begun an advertising campaign to reassure the world that the hub is stable and as its richest family urged the government to help the city’s hotels
• Germany’s growth model is under threat as a new wave of protectionism will have big implications for long-term growth prospects, writes Bloomberg’s Jamie Rush

To contact the reporter on this story: Alexandra Veroude in Sydney at averoude4@bloomberg.net

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

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