U.S.-China Engage on Trade Again in Beijing: Economy Week Ahead

(Bloomberg) -- Investors will be hoping the U.S. and China can put trade talks back on the road to a deal after President Donald Trump said he’s unlikely to meet President Xi Jinping before a March 1 deadline to avert higher American tariffs on Chinese goods.

Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are leading a group of administration officials headed to Beijing, although Lighthizer said recently that it’s not certain a pact could be reached.

Time is running out for the world’s largest economies to strike an agreement before next month, when the Trump administration is set to more than double tariffs on $200 billion of Chinese goods. While the U.S. has said it’s a hard deadline, Trump has also suggested he could agree to extend negotiations beyond the month’s end if progress is being made.

“Our base case is that China will package together enough concessions for the U.S. to declare a partial victory and hold off on tariff hikes,’’ said Tom Orlik, chief economist at Bloomberg Economics. “Absent more concrete details on the discussions, uncertainty around that call is considerable.’’

Here’s our weekly rundown of key economic events.

U.S.

As the Federal Reserve sidelines its rate-hiking campaign, data enters the spotlight this week. The biggest releases are consumer prices for January on Wednesday and industrial production on Friday, as well as the government shutdown-delayed report on December retail sales that will finally deliver a clearer picture of the holiday shopping season. That’s out Thursday. Fed Chairman Jerome Powell speaks in Mississippi on Tuesday, albeit about economic development in rural areas.

For more, read Bloomberg Economics’ full Weekahead for the U.S.

Europe, Middle East and Africa

Germany’s gross domestic product report for the fourth quarter, due for release on Thursday, will provide a firmer glimpse of the health of Europe’s biggest economy at a time when its loss of momentum looks increasingly precarious. It’s just conceivable that a previous official guess of slight growth could be revised closer to a recession after industrial production declined markedly in every month of the quarter. European finance ministers will be able to discuss the region’s economic woes when they meet at the start of the week in Brussels.

In the U.K., industrial production, inflation, retail sales and gross domestic product data will give a full picture of the state of Britain’s economy close to the halfway point of the last quarter before Brexit. Sweden’s Riksbank will set monetary policy on Wednesday and probably stand fast on its plans to raise rates later this year even as an economic slowdown deepens. In Nigeria, it’s election season and GDP data will show how fragile the economy is.

For more, read Bloomberg Economics’ full Weekahead for EMEA

Asia

Japan’s economy likely bounced back in the fourth quarter from a contraction in the third, when the biggest drop in business spending in nine years amid a series of natural disasters weighed on output. But it’s a tame 1.4 percent annualized pace seen by economists as trade tensions loom over the export-reliant nation. The data is out on Thursday. On Friday, Chinese consumer and factory inflation data is due -- the latter may slip into negative territory, causing a drag on the global inflation outlook as China’s factory prices and export prices are closely linked.

Japan GDP Tracker Versus Official GDP

For more, read Bloomberg Economics’ full Weekahead for Asia

Americas

A crucial bill to overhaul Brazil’s pension system will be sent to Congress. In Mexico, industrial production for December comes out on Monday, indicating how the economy reacted to President Andres Manuel Lopez Obrador’s first month in office. On Thursday, Argentine inflation data for January will show the extent to which the removal of more government subsidies is driving up prices.

For more, read Bloomberg Economics’ full Weekahead for Latin America

To contact the reporter on this story: Simon Kennedy in London at skennedy4@bloomberg.net

To contact the editors responsible for this story: Stephanie Flanders at flanders@bloomberg.net, Zoe Schneeweiss, Tom Lavell

©2019 Bloomberg L.P.