Trade Truce, U.S. Recession Risk, U.K.’s Honda Angst: Eco Day

(Bloomberg) -- Good morning Americas. Here’s the latest news and analysis from Bloomberg Economics to get your day started:

  • President Donald Trump said he’ll extend a deadline to raise tariffs on Chinese goods beyond this week, citing “substantial progress” in the latest round of trade talks that wrapped up Sunday in Washington
    • The decision defuses one of the biggest risks hanging over global trade, investment and sentiment, and provides Xi Jinping with some temporary relief as he struggles to arrest an economic slowdown
    • But there could be “new uncertainties” in the final stage of the trade negotiations and China should do its best while preparing for the worst, according to a commentary by state news agency Xinhua
    • Bloomberg Economics reckons a trade deal would likely herald a period of risk-on sentiment, boosting risk assets from emerging-market equities to currencies
  • More than three-quarters of business economists expect the U.S. to enter a recession by the end of 2021, though a majority still estimate the Federal Reserve will continue raising interest rates this year
  • European Central Bank officials poised to debate the need for new long-term loans for banks might have even bigger thinking to do
  • The U.K. and U.S. sought to allay fears of disruption in the multitrillion-dollar derivatives market, vowing to put in place emergency policies to ensure trading continues uninterrupted in the event of a no-deal Brexit
    • A look at how the death of Honda’s U.K. hub sums up Britain’s Brexit-era angst
  • Here’s why Israel’s first increase in interest rates since 2011 is looking more like an aberration by the day
  • Finally, read our preview of the key economic events this week

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