Trade Memorandums, Fed Patience, Fitch Warning: Eco Day

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

• U.S. and Chinese negotiators are working on multiple memorandums of understanding that would form the basis of a final trade deal, according to a person briefed on the talks
• Fed officials widely favored ending the runoff of the balance sheet this year while expressing uncertainty over more rate hikes, minutes of their meeting showed. Carl Riccadonna says while the release was slightly less dovish, it reaffirms patience is the watchword. Vice Chair Richard Clarida said the Fed could soon decide when to stop shrinking its balance sheet
• The European and global economic environment has become more threatening for France in recent months, with the recession in Italy a particularly serious concern, the French finance minister said
• Italy’s economy hasn’t been faring well lately, and the country isn’t happy about it if the mood on social media is any guide
• The U.K. has been put on a formal downgrade warning by Fitch Ratings, which pointed to increased risks that the country could tumble out of the European Union without an agreement in place
• Since he became Poland’s central bank governor three years ago, Adam Glapinski has extended the outlook for how long official borrowing costs will stay on hold before eventual tightening. Now, he’s said for the first time that rates could theoretically go down
• Key exporters Japan and South Korea provided fresh evidence over the past two days that the slump in global trade has further to run, and is beginning to spread to factories
• Australian employment surged in January, led by full-time roles, suggesting the Reserve Bank has more time to assess whether the economy needs an interest-rate cut.
• Still, Westpac Banking Corp. Chief Economist Bill Evans says Australia will cut interest rates twice this year, reversing his call for no change

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

To contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, Brett Miller

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