Trade Tense Even Without Manipulator Tag: World Economy This Week
The global economy saw another week of trade drama, with the Indonesian president’s warning in Bali that “winter is coming” still echoing in the ears of the financial elite. China was spared the label of currency manipulator in the U.S.’s highly anticipated semi-annual report, but still got whacked with shipping costs, and now its economy is showing further signs of slowing.
Here’s our weekly wrap of what’s going on in the world economy.
The U.S. may have gone easy on the name calling, but President Donald Trump still aims to squeeze China by withdrawing from a long-time shipping treaty, and exporters already are feeling the trade-war pain, including in the factory heartland. The American defense secretary said the U.S. wasn’t out to contain China, while the commerce secretary challenged a fragile trans-Atlantic trade truce by accusing the European Union of dragging its feet over market-opening pledges. Meanwhile, the White House formally notified Congress of planned negotiations with the EU, Japan and Britain. India is still unhappy with how the Regional Comprehensive Economic Agreement is shaping up. In the data: The U.S. is sailing along with a fresh record in job openings and a rise in factory output. China’s economy slowed more than expected in the third quarter and recently saw weaker price growth and cut its U.S. Treasury holdings for a third month.
- Trump’s China Battles Give Taiwan Supporters New Influence
- Envoy Says Beijing Didn’t Want a U.S. Trade War But Will Respond
- Japan’s Exports Unexpectedly Fall After Natural Disasters
- China Is Forced to Reconsider Its Route Into Eastern Europe
- Moldova Grudge Could Cost U.K. Access to $1.7 Trillion Projects
Monetary Policy Puzzles
The Bank of Korea held its key interest rate, while Kazakhstan hiked for the first time since 2016 on the tail of Russia’s tightening. Federal Reserve minutes of the September gathering showed that a majority favored moving above the neutral rate for the economy, at least temporarily. China’s central bank chief said they’re preparing for all the risks in currency policy, while Bank of Japan’s Haruhiko Kuroda noted that first signs of a stimulus exit will be detected in bond yields. A European Central Bank official sees the Phillips Curve slowly awakening, and another called for patience on rate-hike timing clarity while saying we could all get answers by summer 2019. Economists expect the ECB to end its negative interest-rate policy in January 2020, even as as a Paul Romer – winner of this year’s Nobel prize – warns investment is being cramped by crisis fears.
- There’s a New Bullard Rule That Finds No Need to Raise Rates
- Inflation Stalking Russia Adds to ‘Hopelessness’ Among Consumers
- China Credit Growth Jumps on Looser Monetary Policy, Data Tweak
- Poland May Consider Rate Increase Within Year, Ancyparowicz Says
- Don’t Think Romania’s Interest-Rate Pause Means Hikes Are Over
Things Fall Apart
Brexit battles drag on as one side fails to understand the other, while further south, Italy’s populist budget rankles the EU. France’s Emmanuel Macron warns that Europe could be sleepwalking into a repeat of nationalism. Meanwhile, Saudi Arabian officials say they’re ready to hit back after any retaliation – including sanctions – over a missing journalist. The incident is rebounding on the kingdom’s investor conference, with Treasury Secretary Steven Mnuchin and IMF Chief Christine Lagarde among high-profile dropouts.
- For All Trump’s Talk, the Saudis Don’t Buy That Much U.S. Stuff
- Meltdown in Socialist Venezuela Lets a Thousand Markets Bloom
- Euro-Area Budgets Land in Brussels: Here’s How They Stack Up
- Path to Euro Gets Even More Complicated for Latest Hopeful
- Saudi Arabia Insight: Khashoggi Case Could Unravel MBS Project
- Tremors Rattling World Economy: Takeaways From IMF Talks in Bali
- Pick Card Payments Over Cash and the Environment Will Thank You
- Meet Monopsony, Creature of a Puzzling Labor Market: QuickTake
- Another Reason to Worry About Fed Ammunition: Eco Research Wrap
- Spookily Quiet U.S. Markets Are Suddenly Showing a Lot of Fear
- South Africa Slump Batters Smaller Neighbors Protecting Rand Peg
- ECB Bank Watchdog Race Intensifies With Donnery Gaining Momentum
- U.K. Inflation Slowdown Gives BOE Time Amid Brexit Perils
- Snapshot of New York City’s Most Privileged City Dwellers
- Goldman Says Dollar’s Reserve Position Hit by U.S. Sanction Risk
- Bangkok’s ‘Dr. Love’ Woos Chinese Couples With Fertility Tours
Chart of the Week
©2018 Bloomberg L.P.