U.S. Economic Plan, Australia Cliffhanger, Omicron Hit: Eco Day

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

• President Joe Biden said there’s still a chance he can strike a deal with Senator Joe Manchin to get his Build Back Better economic plan through Congress, despite the West Virginia Democrat’s rejection of the measure
  • Biden’s promise to reduce income and wealth disparities in the U.S. has suffered a major setback with the collapse of his social-spending bill
• The Reserve Bank of Australia’s first meeting of 2022 shapes up as a cliffhanger with economists split over the fate of the central bank’s bond-buying program, while the omicron variant only adds to the uncertainty
• Omicron is dealing a blow to the world economy just as the pandemic enters its third year as a drag on growth and driver of inflation
  • Bloomberg Economics’ base case for the global economy in 2022 is a robust recovery with cooling prices and a shift away from emergency monetary-policy settings
  • It’s too early for a definite verdict on the omicron variant of Covid-19. Apparently more contagious than its predecessors, it may prove less deadly too. That would help the world get back to something like pre-pandemic normal
• Iron ore’s heady days are fading. China is pushing ahead with cutting carbon emissions, steel output is expected to contract for a second year, while a debt-laden property sector is weighing on steel consumption and broader growth
• Thailand’s central bank will likely keep its benchmark interest rate unchanged Wednesday to support a nascent economic recovery as omicron threatens the outlook
  • Thailand halted its quarantine-free entry program after less than two months, citing concerns about the potential spread of the variant by arriving tourists
• Japan’s government raised its monthly view of the economy for the first time since the summer of 2020, in a sign of confidence in the recovery even amid risks from omicron
• Turkey’s emergency measures to bolster the volatile lira are in effect an interest rate hike in disguise, steps that leave the government budget more vulnerable to future currency shocks
• Mexico’s central bank isn’t committed to a pace of half-point increases to its benchmark interest rate after delivering a hike of that magnitude in December, according to outgoing Governor Alejandro Diaz de Leon

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