Draghi Seen Raising Rates, Italian Budget, U.S. Jobs: Eco Day

(Bloomberg) -- Happy Friday, Europe. Here’s the latest news from Bloomberg Economics:

• Mario Draghi will raise the European Central Bank’s interest rates before his term as president ends in October 2019 amid continued risks from U.S. tariffs and Italian politics, according to a Bloomberg survey
• Budget battles. Italian leaders started budget talks with an eye on markets, reassuring investors that they won’t push the deficit to the European Union limit of 3 percent of gross domestic product
• Lost in translation. Sweden’s central bank found itself the target of, at times colorful, criticism from analysts on Thursday after its latest monetary policy statement seemed to leave many of them confused
• Twists and quirks. U.S. economic activity continues to build momentum, but the August jobs data may suggest otherwise -- at least at first glance, argues Carl Riccadonna
• No deal, yet. A Nafta deal doesn’t look likely this week. Talks between the U.S. and Canada have seemed upbeat, but are not expected to lead to a deal this week
• Chinese wall. China’s growing share of the global economy means its familiar role as the bulwark between emerging market pain and developed economies has never been more crucial
• Momma knows best? The Bank of Japan should gradually reduce its corporate bond purchases because they’re raising the risk of reckless spending by firms, a former BOJ executive director says
• More spending. Japanese household spending eked out its first gain in six months in July as overall pay continued to show gains, offering hope that higher wages may be starting to loosen consumers’ purse strings
• Rate hike. Philippine central bank Governor Nestor Espenilla flagged another interest-rate hike after inflation exceeded 6 percent in August for the first time in nine years
• Inverted curve: New York chief John Williams says the Fed shouldn’t hesitate to invert the yield curve if it becomes necessary to achieve the central bank’s targets. Jerome Powell also has a big question to grapple with
• Pacific peso. Australia’s dollar is finding itself in unusual company, getting sold along with former emerging-market darlings such as the rupiah and rupee. On the rupiah, a question arising now is what constitutes a safe level of public debt for Indonesia
• More debt. Oil isn’t the only headache for India as the rupee slides. Add external debt to the list
• World this week. Here’s what happened in the world economy and what it means

To contact the reporter on this story: Anirban Nag in Mumbai at anag8@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Karthikeyan Sundaram, Ashutosh Joshi

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