Greetings,
Let’s start with the Eurozone. The latest ECB minutes point to the central bank’s frustration with the currency bloc’s governments’ inaction. The Governing Council is effectively saying: “We are hitting a wall here – it’s time for the Eurozone governments to step up.” Labor reforms are especially important in this environment in order to support the ECB’s effort.
Source: ECB Governing Council minutes
Indeed, the ECB is providing government deleveraging via QE, as privately held government debt balances collapse.
Source: Credit Suisse
1. In other Eurozone developments, the IMF insists that it would only participate in the bailout process if Greece receives a number of debt concessions. The IMF wants to turn the current Greek debt into something resembling a zero-coupon perpetual bond.
Source: Reuters
Source: ?@fastFT
2. It’s interesting that while this bailout debate rages between the Eurogroup and the IMF, the Greek fiscal situation continues to improve. The nation unexpectedly generated a €2.4bn budget surplus in 2016.
Source: ?@fastFT
3. Next, we have a comparison of household leverage trends for Germany, France, Italy, and Spain. Amazing contrast.
Source: Credit Suisse
4. In another intra-Eurozone comparison, here is the divergence between Germany and France on construction output. Capital Economics believes this trend will continue.
Source: @CapEconEurope
In the UK, retail sales jump, beating expectations.
However, all this consumer spending is set to slow, as UK households have now blown through a great deal of their savings.
Source: Barclays
1. Turning to emerging markets, Iraq gets a $5.4 billion bail-out from the IMF. The nation’s fiscal situation has completely deteriorated.
Source: @JavierBlas2
2. Nigeria’s oil output falls sharply, disrupted by the militants.
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