Trump Shies Off Sanctions, China’s Lexicon, EM Weakness: Eco Day

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

• President Donald Trump has indicated to aides that he doesn’t want to further escalate tensions with Beijing, and has ruled out additional sanctions on top officials for now. Earlier, he had ordered an end to Hong Kong’s special status with the U.S.
• Dealing with China is so complex it’s produced its own lexicon: Engagement. Containment. Confrontation. Constrainment. Even “con-gagement”
• Compared with advanced economies, activity in emerging markets fell faster and deeper as the Covid-19 shock hit. Recovery is proving slower and shallower, writes Bjorn van Roye
• Hong Kong, until recently an oasis of political stability in Asia, is now gripped with unprecedented regulatory and legal uncertainty that threatens its position as one of the world’s top financial hubs
• Thailand is turning to satellite images for faster updates on the economy than official data can provide -- and the signs suggest a nascent recovery is underway
• India’s trade balance returned to a surplus in June after 18 years, as a decline in imports was sharper than exports
• Indonesia’s central bank will face another tight interest rate decision Thursday, with a majority of economists expecting more easing to help revive economic growth
• ECB officials will meet Thursday aware that while they’ve probably done enough to fight the coronavirus crisis for now
• New Zealand inflation slowed, falling toward the low-end of the central bank’s target range, amid a weakening global oil price in an economy already stalling due to the Covid-19 lockdown
• The Bank of Japan’s higher confidence in the economy’s trajectory -- reflected in specific forecasts instead of ranges -- likely doesn’t alter the policy outlook, writes Yuki Masujima
• The Fed should consider holding interest rates near zero until inflation is above its 2% target, said Philadelphia Fed President Patrick Harker, echoing his colleague Lael Brainard
• Optimism about a nascent recovery in the U.S. was dampened by increased uncertainty over the path of the coronavirus, according to a new Fed report
• The Bank of Canada pledged for the first time to keep interest rates at historically low levels for years to come
• It’s a similar story in the U.K., where central bank Governor Andrew Bailey told lawmakers rates are likely to stay low for a long time
• A brutal day of combat on the India-China border last month may accomplish what years of Pentagon and White House outreach has struggled to achieve: draw the U.S. and India closer militarily
• As countries across Asia Pacific struggle with resurgences of the coronavirus, one data point is steering government responses: the share of cases with no clear indication of how infection occurred

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