Trade Deal on Track, Hungary Rates, German Spending: Eco Day

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

  • U.S. and Chinese trade negotiators discussed the Phase One trade deal, with the U.S. saying both sides saw progress and are committed to its success
  • The U.K. retail industry has been open for almost two months following the pandemic lockdown, but people seem to be venturing back out to stores, restaurants and bars more slowly in Britain than in other parts of Europe
  • German companies and consumers cut spending sharply during virus-related restrictions, leaving the economy in a deep slump from which it will only slowly recover
  • It’s known that Covid-19 will leave some people with long-lasting physical, cognitive and psychological impairments, like scarred lungs, post-viral fatigue and chronic heart damage. What’s still emerging is the extent to which the enduring disability will weigh on health systems and the labor force
  • A surprise surge in inflation is underpinning Hungary’s pledge to end interest-rate cuts despite suffering the worst economic plunge in the European Union’s east
  • U.S. inflation has slowed sharply since the onset of the pandemic, with a Fed study pinning the blame on a collapse in demand as consumers sheltered at home
  • Young people may face a long slog in the U.S. labor market as customer-facing jobs at restaurants and in services may not recover, Richmond Fed President Thomas Barkin said
  • India, already seeing some success luring supply-chain investments away from China, may team up with Japan and Australia to counter Chinese dominance as geopolitical tensions escalate
  • The recovery in Chinese consumption is moving in two different directions, with the wealthier shopping for luxury goods and taking beach holidays while poorer households cut back
  • Australia’s household debt, among the highest in the developed world, could exacerbate a severe economic downturn by forcing a pullback in consumption, a central bank research report showed
  • Consumer confidence in Canada continued its march back toward pre-pandemic levels

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