Powell Testimony, ECB Next Steps, U.K. Contraction Risk: Eco Day

(Bloomberg) --

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

• Jerome Powell is likely to leave Federal Reserve interest-rate cuts firmly on the table when he appears before Congress this week, even though the latest U.S. jobs report dialed down the urgency to ease borrowing costs
  • The world’s main industrial economies are in mounting need of lower rates as growth slows and slack opens up, according to a report from Nomura
  • Meanwhile a growing chorus of Wall Street foreign-exchange analysts is writing about the risk that U.S. President Donald Trump may move beyond words in his quest for a weaker dollar

• Christine Lagarde is set to be confirmed in October as the next president of the European Central Bank, after the region’s finance ministers formally signed off on the agreement reached by governments last week

• Financial firms including Goldman Sachs Group Inc. and Morgan Stanley are predicting that the ECB’s flagship crisis-fighting tool -- quantitative easing -- will soon make a comeback

  • The ECB will have plenty of newer notes to consider if it returns to the corporate-bond market as part of stimulus measures
• The U.K. economy probably shrank for the first time since 2012 in the second quarter, according to Bloomberg’s latest survey of economists
• Turkey’s new central bank chief faces one of the toughest acts the world of central banking has to offer. Cut interest rates too little and risk President Recep Tayyip Erdogan’s ’s fury; cut too much and watch markets suffer
  • Bloomberg Economics’ Ziad Daoud examines how the central bank may walk the tightrope between Erdogan and markets
• A drop in prices for cabbages and cucumbers in Russia helped decelerate inflation in June, paving the way for the central bank to deliver a second consecutive interest-rate cut later this month.

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, Lucy Meakin

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