U.S. Recession Risk, China's Quiet Stimulus, U.K. Homes: Eco Day

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

• A combination of the China trade war and government shutdown could be enough to tip the U.S. economy into recession this year, according to Torsten Slok, Deutsche Bank’s chief international economist
  • That comes after a Federal Reserve survey showed the still-strong U.S. economy has seen signs of slowing in recent weeks.
• Against that backdrop, the Fed has plenty of reasons to pause its interest-rate increases in March to take stock of the economy, according to former Atlanta Fed President Dennis Lockhart.
• China has been quietly guiding interbank borrowing costs down without actually cutting official interest rates, with the latest move a record one-day injection of cash into the market.
  • Meanwhile, the outlook for the world’s second-largest economy remains in laser focus, as questions over the global outlook multiply. Here’s our preview of Monday’s GDP report.
• The gloom gripping the U.K. housing market deepened in December, with real-estate agents reporting falling prices and optimism at its lowest ebb in two decades.
  • Also in the U.K., Prime Minister Theresa May won the vote of confidence in her government yesterday, but still needs to secure a Brexit deal. Bloomberg Economics thinks she will, and before the March 29 deadline.
• In Europe, Sabine Lautenschlaeger became the latest senior European Central Bank official to suggest there’s still a case for increasing interest rates this year.
• Indonesia’s central bank left its benchmark interest rate unchanged for a second month, while keeping the door open for more policy action if needed.
• Finally, Jamaica’s central bank has turned to an unorthodox method of communicating its consumer price policy: reggae.

To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Fergal O'Brien

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