Powell Upbeat, Yield Curve Signals, China’s Risks: Eco Day

(Bloomberg) --

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

• Federal Reserve Chairman Jerome Powell struck an upbeat tone in gauging the ability of policy makers to extend the record U.S. economic expansion, while signaling interest rates would probably remain on hold
• If 2019 was the year the yield curve went mainstream, with an inversion sending a stark recession warning, then 2020 is already shaping up as a welcome return to normality
• The pressure U.S. Trade Representative Robert Lighthizer and the Trump administration are applying on the World Trade Organization may, in just a few weeks, render the Geneva-based arbiter of trade inoperative
• China and the U.S. “reached consensus on properly resolving relevant issues” and agreed to stay in contact on the remaining points for a “phase one” trade deal during a phone call Tuesday
• China’s banking sector grew riskier over the last year, with about 13% of the nation’s 4,379 banks and other financial firms considered “high risk” by the central bank
• Australian women accounted for two-thirds of employment growth over the past year, Reserve Bank of Australia Deputy Governor Guy Debelle said Tuesday in a speech looking at soaring labor participation and weak wage growth in the nation’s economy
• Prime Minister Boris Johnson’s manifesto has left a question mark over the size of the potential fiscal boost under a Conservative-led government. That means the Bank of England’s next move could well be a rate cut, Dan Hanson writes
• The Bank of Israel kept interest rates on hold even as it conceded that political uncertainty risks damaging the economy, opting to keep its minimal room for maneuver as major central banks suspend monetary easing
• Prime Minister Narendra Modi is finally attempting to overhaul India’s most controversial labor laws to attract investment and make it easier to do business
• When Philippine President Rodrigo Duterte took office in 2016, he promised $165 billion in spending to “build, build, build.” After a false start, he’s trying again

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, Michael S. Arnold

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