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.