U.S.-China Talks, Euro PMI, Merkel Priority, BOJ Words: Eco Day

(Bloomberg) -- Welcome to Thursday, Americas. Here’s the latest news from Bloomberg Economics:

• The revival of trade negotiations between the U.S. and China after a months-long standstill has generated new hopes in financial markets that an all-out trade war between the world’s two largest economies may be averted.
• The Federal Reserve is ready to hike again so long as the U.S. economy stays healthy, minutes of its policy meeting showed. Meantime, policy makers’ discussion about how high to lift their target interest rate is intensifying
• Long-run economic scenarios for the world economy show that U.S. GDP growth is expected to surpass that of China in 2040, according to the OECD. By that time, China’s economy will be 77 percent larger in international dollars than that of the U.S
• Angela Merkel is prioritizing securing the European Commission presidency for Germany instead of the top job at the European Central Bank, according to Handelsblatt
  • Merkel’s moves means the race to succeed Mario Draghi is more open than previously thought. But, even without a German at the top, it’s far from clear that the ECB will change its planned policy course
  • The ECB’s expansive monetary-policy stance is out of touch with the euro area’s economic upturn, making it all the more important for the institution to begin changing course, according to Governing Council member Jens Weidmann
  • Euro-area factories are taking a hit from higher raw-material costs and global trade tensions, taking the shine off a better economic performance in the region in recent months
• Russia’s central bank said it’s suspending purchases of foreign exchange through the end of September in an effort to steady the ruble, which has fallen to the lowest level in two years amid fears of further U.S. sanctions.
• U.K. retailers reported robust August sales, spurred by groceries and online shopping
  • Net migration from the EU to the U.K. slipped to its lowest level since 2012, but the rich still want to move to London
• Norwegian economic growth kept up momentum in the second quarter, boosted by consumer spending and investments, as the central bank nears its first interest rate increase in more than seven years
• Sweden’s unemployment rose for a third month as more people sought jobs amid accelerating economic growth.
• Australian Prime Minister Malcolm Turnbull must battle to survive another day of power plays before lawmakers head home for a two-week recess. The irony is he’s overseeing an economy doing nicely
• The Bank of Japan’s words are diverging further from its actions and the erosion of its credibility could end up hurting the central bank, according to Kunio Okina, a former BOJ official

To contact the reporter on this story: Zoe Schneeweiss in London at zschneeweiss@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Emma Haslett

©2018 Bloomberg L.P.