U.S. Services Slump, Fed Bets, Hong Kong and Shenzhen: Eco Day

(Bloomberg) — Welcome to Friday, Asia. Here’s the latest news and analysis from Bloomberg Economics to help get your day started:

• U.S. service industries joined manufacturing in taking a big step back, as the ISM non-manufacturing index dropped to 52.6 in September, a three-year low
  • This, and a slew of other disappointing data this week, all point to a soft U.S. jobs report on Friday
  • Traders boosted bets for the Federal Reserve to cut its benchmark interest rate again this month
• Hong Kong and Shenzhen: Two cities grappling over China’s future. Hong Kong’s waning allure for ambitious mainland Chinese is symbolic of the shifting balance of power and opportunities between the neighboring cities
• Bank of Japan Deputy Governor Masazumi Wakatabe said: “In an ideal world, we’d like to reach 2% inflation target and we’d like to get out of this negative interest rate policy as soon as we can.”
• Germany’s economic woes are becoming more pronounced, with a sharp slowdown in services suggesting the pain from its industrial crisis is spreading
• Meanwhile, the broader euro-area economy stagnated at the end of the third quarter, held back by an industrial recession and a sharper-than-expected slowdown in services
• Here’s the first episode of a new season of the Stephanomics podcast, looking at how the trade war has already caused a recession for America’s factories

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