FX Manipulator No More, U.S.-EU Brawl, Frankenshock: Eco Day

(Bloomberg) --

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

• The Trump administration lifted its designation of China as a currency cheat, saying the nation has made “enforceable commitments” not to devalue the yuan and has agreed to publish exchange-rate information
• China exported slightly more in 2019, while imports fell, according to data released in Beijing. Exports to the U.S. dropped almost 15% in December when the trade truce was announced, the ninth straight month of declines
• The European Union’s new trade chief will be in Washington for the next three days trying to head off a transatlantic commercial war on several fronts. The prospects for success look slim
• Swiss National Bank President Thomas Jordan is finding it’s hard to get the genie of unconventional monetary policy back in the bottle once it has been let out. Meantime, the Swiss franc hovered near its strongest levels since 2018 as the U.S. Treasury added Switzerland back to its currency watch list
• Mark Carney’s last policy decision as Bank of England governor could prove to be a dramatic one as the weakening economy pushes traders to raise the odds on an interest-rate cut to a coin toss
• In the year the European Central Bank doubled down on calls for more fiscal stimulus, the euro area’s biggest economy managed the feat of a record budget surplus instead. President Christine Lagarde has written to policy makers asking them to refrain from publicly discussing the ECB’s impending strategy review before it is formally announced on Jan. 23
• The U.S. budget deficit widened to $356.6 billion in the first three months of fiscal 2020 as spending rose more than revenue, keeping the federal shortfall on pace to exceed $1 trillion by year-end
• Hong Kong’s government is usually eager to play up the city’s resilience in the face of economic calamity, like the bounce-back after the Asian financial crisis and its recovery following the 2003 SARS epidemic. It’s now settling for “less bad than before”

To contact Bloomberg News staff for this story: James Mayger in Beijing at jmayger@bloomberg.net

To contact the editors responsible for this story: Jeffrey Black at jblack25@bloomberg.net, Jiyeun Lee

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With assistance from Bloomberg