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Trade data took a beating this week — especially in Asia, where it really counts.

That, and the broader theme of global economic weakness, prompted a dovish message that we heard from the European Central Bank and others around the world. It was a bit more difficult to read whether the Federal Reserve is ready to abandon policy tightening.

Here’s our weekly wrap of what’s going on in the world economy.

Slow Ships

Trade-reliant Asia was the biggest trade-war loser this week, with exports data for Japan, South Korea, and Singapore all taking a tumble and Hong Kong reporting economic growth halved in the fourth quarter. Our global trade dashboard reflects the pain rippling across regions as the world’s two biggest economies continue sparring face-to-face — mostly on bigger and more stubborn issues like currency manipulation and intellectual property. Markets cheered that they seemed to be drawing up some plans for a deal. Other crowds, including in Europe, are more preoccupied with the looming threat of U.S.-imposed auto tariffs on an already-ailing industry, even as Japan says they won’t be burned while they’re keeping up trade talks with the U.S. The Austrian chancellor said he thinks President Donald Trump “has it in for Germany” amid contentious EU talks.

Read More:

  • U.K. Admits Trade Deals With Japan, Korea Unlikely Before Brexit
  • Trump Farm Chief Cites Trade War, Economy for Bankruptcies
  • Why Kim Jong Un Is Looking to Vietnam for Lessons: QuickTake

How Dovish

Fed officials took us for a ride again, signaling the end of their balance sheet run-off in minutes released Wednesday while showing disagreement among themselves on whether a 2019 interest-rate hike was in order. Fixing their “dot plot” could help things. The ECB sounded far more dovish amid economic growth risks, as did Australian central bankers, and the Bank of Japan even floating the possibility of more stimulus if the yen keeps strengthening. In China, the question is not “if” but “which rate” on easing ahead. Actions spoke louder than words in Indonesia, where policy makers held their fire again after a tightening bonanza in 2018, and in Turkey, where the central bank took a baby step toward easing.

Read More:

  • Polish Monetary Outlook Lurches From Tightening to Possible Cuts
  • World’s Best Carry Trade Intact as Egypt Pivots to Rate Cuts
  • Modi Gets $4 Billion From India’s Central Bank Before Polls

It’s Not Just Trade

Beyond the rocky exports data, Germany was a critical place to look this week as we judge just how bad the global demand picture looks. An investor confidence measure there improved for a fourth month, but Europe’s powerhouse also saw manufacturing shrink the most in six years. Meanwhile, Turkey’s probably in recession. For bright spots, you can take the glass-half full approach with some steady growth signs out of Israel and Thailand, though the latter faces a big test with election drama through next month. 

Read More:

  • Brexit Jobs Boom Has a Flip Side That’s Holding the Economy Back
  • South Africa’s Worsening Economic and Fiscal Outlook in Charts
  • Malaysia Nears Deal With China to Revive $20 Billion Rail

Weekend Reading

  • Optimism or Wishful Thinking? Brazil’s Recovery Has Bit of Both
  • What to Watch at China’s Biggest Meeting of the Year: QuickTake
  • Mysterious Demise of Phillips Curve Is Weirdest Down Under
  • Swiss Ski Resorts See Good Times After Franc Sent Them Downhill
  • Take a Peek on the ECB’s 38th Floor as Philip Lane Awaits Role
  • Move Over GDP: Italy’s Statistics Office Checks People’s Mood
  • China Plan to Integrate Hong Kong, Macau Skirts Tough Questions
  • Empty Luxury Flats Dot Reykjavik as Iceland’s Economy Cools

Chart of the Week

Worlds Apart: The Two Koreas After Seven Decades of Separation

 

To contact the author of this story: Michelle Jamrisko in Singapore at mjamrisko@bloomberg.net

To contact the editor responsible for this story: Zoe Schneeweiss at zschneeweiss@bloomberg.net

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