Greek debt drama rekindled
Once again Greece faces a deadline to receive much-needed bailout funds from its international backers, but so far it has not fulfilled the terms of its prior commitments. With heavy debts coming due in April and July, Greece hopes to strike a deal at the last EU summit before the European election calendar kicks off in March. Finance ministers meet on 20 February, with Greece near the top of their to-do list. There is mounting concern that several European partners will not participate in the bailout any longer if the International Monetary Fund doesn't. The IMF this week called Greece’s debt burden unsustainable and called for debt forgiveness. Germany’s finance minister said debt cannot be forgiven as long as Greece remains a member of the euro area, though German chancellor Angela Merkel later said the eurozone must remain together as one bloc.


Le Pen lays out economic vision
Populist French presidential candidate Marine Le Pen formally kicked off her campaign this week, laying out her economic agenda. Le Pen called for pulling France out of the eurozone, reintroducing the franc and drastically curbing immigration. Le Pen has consistently led the polling in the first round of France’s two-round system but trails a variety of centrist challengers in the second round.


China’s reserves slip
Having peaked in 2015 at over $4 trillion, China’s foreign exchange reserves slipped below $3 trillion in January, according to government data. Beijing has been selling down reserve assets for the past 18 months to try to stem capital outflows from the Chinese mainland.


Commons backs Brexit
The UK House of Commons voted on Wednesday to allow the government to begin negotiations with the European Union. The bill now goes before the House of Lords, which can delay but not halt the triggering of Article 50.


Court finds in favor of DOL rule
A US federal judge upheld the legality of the US Department of Labor’s fiduciary rule on Wednesday. The rule, scheduled to go into effect on 10 April, would require financial advisors to act in their clients' best interest when advising them about retirement accounts. Critics say the rule will limit consumer choice and make giving advice too costly.


Euro too low for Germany
German finance minister Wolfgang Schaüble this week acknowledged that the euro’s exchange rate with the US dollar is too low for Germany’s competitive condition but said that the European Central Bank must make policy for all of Europe, not just Germany. Tensions were inflamed both inside and outside the eurozone as Germany posted a record annual trade surplus, in excess of €250 billion. US president Donald Trump’s principal trade advisor commented recently that Germany has been manipulating the euro exchange rate in order to gain competitive advantage.


Trump consults with Asian leaders
US president Donald Trump spoke by phone for the first time with Chinese president Xi Jinping and reaffirmed the US commitment to the One China policy. That policy was called into question during the presidential transition, when Trump had direct contact with Taiwanese president Tsai Ing-wen, an apparent breach of protocol. Trump urged closer US–China ties in the call, according to the White House. The US president is scheduled to meet Japanese prime minister Shinzo Abe at the White House later on Friday.


US earnings rebound
As of 7 February, Thomson Reuters reports that fourth-quarter earnings for the S&P 500 Index are expected to increase 8.2% from the fourth quarter of 2015. Of the 300 companies in the S&P 500 that have reported to date for the fourth quarter of 2016, 68% have reported earnings above analyst expectations. The Q4 2016 blended revenue growth estimate is 4.3%. The forward four-quarter (1Q17– 4Q17) P/E ratio for the S&P 500 is 17.4.



  • Japan reports Q4 preliminary gross domestic product on Monday, 13 February
  • The eurozone reports preliminary Q4 GDP on Tuesday, 14 February
  • The United Kingdom releases consumer price data on Tuesday, 14 February
  • The United States reports retail sales, industrial production and consumer price data on Wednesday, 15 February
  • The UK releases January employment data on Friday 17, February 



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Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News;Financial Times;;;


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