Powell Flags Cut, U.S. Defies China, Korea-Japan Woes: Eco Day

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

• The Fed is preparing to cut interest rates for the first time in a decade because it sees a cooling global economy; indeed, nothing seems likely to stop Jerome Powell from cutting later this month. Carl Riccadonna says the easing is mainly spurred by uncertainty. The dollar’s fate hinges on whether an anticipated cut is a one-and-done scenario or the start of a cycle, says Pimco’s Erin Browne
• Trump administration officials signaled support for pro-democracy protesters in Hong Kong -- and defiance toward the Chinese government -- by granting a series of high-level meetings this week to a Hong Kong bookseller who has drawn Beijing’s ire
• Japan and South Korea say they’re willing to meet over Tokyo’s move to restrict vital exports to its neighbor, but neither has much political incentive to climb down. The BOJ needs to extend its pledge to keep extremely low rates and there’s a good chance it will tweak the time frame as soon as the July meeting, an ex-official says
• For the third time in a month, Chancellor Angela Merkel had to downplay concerns health issues could affect her leadership ability
• The U.S. will investigate a French plan to impose taxes on technology companies, a move that has been a prelude to new U.S. tariffs under the Trump administration
• Fed independence moved front and center in Congress as Powell said he wouldn’t stand down from his job if President Donald Trump attempted to fire him
• Bank of Canada officials flagged elevated concerns about global trade tensions, even as they left rates unchanged for a sixth straight decision. Indeed, Governor Stephen Poloz warned that while investors may think central banks can prevent a trade war-induced recession by cutting rates, it’s never that simple
• Someone forgot to tell Africa trade wars are en vogue. While the biggest economies try to outdo each other with tariffs, the continent with perhaps the most upside in cross-border commerce has been piecing together the world’s largest free-trade zone
• The U.K. housing market saw an increase in new buyers for the first time since November 2016 last month, the Royal Institution of Chartered Surveyors said
• Now that investors have had a few days to digest President Erdogan’s indisputable influence over the central bank, the question is: how fast will Turkish borrowing costs fall?
• In Spain, the olive’s loss is aluminum’s gain (Podcast)
• Standing captive on the bow of his boat, Vietnamese fishing trawler captain Tran Van Nhan and his crew were told to stay quiet and look away as Chinese sailors wielding electric prods stole their catch

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, Paul Jackson

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