ECB Loans, U.S.-EU Talks Stumble, Japan's Tax Hike : Eco Day

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Welcome to Thursday, Europe. Here’s the latest news and analysis from Bloomberg Economics to help get your day started:

• The European Central Bank will offer euro-area banks generous terms on its upcoming long-term loans when it meets next week but won’t do anything to soften the impact of negative rates, economists predict
• Meanwhile a litany of domestic dilemmas on both sides of the Atlantic threaten to frustrate efforts at a U.S.-EU trade pact before they’ve even begun
• Also on trade tensions, China’s growth outlook is dimming -- even before higher tariffs kick in, says Bloomberg Economics’ Chang Shu. Morgan Stanley’s James Gorman isn’t expecting a full-blown trade war between the U.S. and China
• China’s slowdown has likely tipped Japan’s economy into recession, though not by enough to justify delaying a sales tax hike, according to the head of a government committee that charts the economic cycle
• New Zealand forecast lower surpluses and higher debt in favor of delivering fiscal stimulus to a sluggish economy in a budget aimed squarely at improving people’s well-being
• A long slog awaits Turkey even if its first recession in a decade ended last quarter

To contact the reporter on this story: Enda Curran in Hong Kong at ecurran8@bloomberg.net

To contact the editor responsible for this story: Jeffrey Black at jblack25@bloomberg.net

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