Virus Impact, China Rate Cut, U.S. Inventory Cloud: Eco Day

(Bloomberg) --

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

• China’s central bank provided medium-term funding to commercial lenders and cut the interest rate it charges for the money, a move widely anticipated by analysts to cushion the economy from the virus epidemic
  • That comes as analysts predict the outbreak, and China’s efforts to stop the spread, mean the economy will grow slower this quarter than first thought, with the median forecast now for growth to be the slowest in 30 years
  • Most U.S. factories in China’s manufacturing hub around Shanghai will be back at work this week, but the “severe” shortage of workers due to the coronavirus will hit production and global supply chains, according to the American Chamber of Commerce in Shanghai
• The inventory cloud that’s been looming over U.S. manufacturing is starting to dissipate
• German exporters are also likely to suffer from the coronavirus outbreak in China that’s threatening to disrupt global supply chains, according to the Bundesbank
• As worries mount, finance leaders from across the world will gather in Saudi Arabia this week to discuss a global economy coming under increasing strain
• “Nobody trusts you,” German lawmaker Joerg Meuthen told European Central Bank chief Christine Lagarde, railing about negative interest rates -- and while enduring bluster is par for the course for ECB presidents, the Feb. 6 encounter in the European Parliament also illustrated how politically charged that stimulus tool has become
• U.K.’s chief Brexit negotiator will set out Britain’s goals for talks over its future relationship with the European Union in a speech in Brussels on Monday as the two sides prepare to thrash out an agreement before the end of the year

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, Zoe Schneeweiss

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