Arm-wrestling within the Italian government and between Italy and Brussels to find a solution to the Italian budget and avoid the Excessive Deficit Procedure. After Italy’s exit from a technical recession in H2 2018, economic data are still pointing to weakness, and many risks loom in the second half of this year.
Risk FactorsThe table within the article presents risk factors with judgmental probabilities (i.e. not market based). It also develops the possible market impacts. Macroeconomic Context - Our convictions and our scenariosThis section provides a reminder of our central scenario and alternative scenarios Macroeconomic picture by areaAn overview of the macroeconomic outlook for world’s major economic regions
CIO Views: Central Banks Fuel markets: Illusion vs Reality This Month’s Topic: Italy: A Long and Winding Road
The worst case scenario of further trade escalation has been averted. The G20 meeting over the weekend resumed the negotiations between China and US on trade, after the tariffs increase in May on$200bn of Chinese products, and the consequent Chinese retaliation,which both put financial markets under pressure and increased downside risk to the economic outlook.
Once accepted the idea that the emerging world may behave like a block in period of crises (as the group of advanced countries also does), one must wonder whether one should go beyond that and consider that the emerging world deserves better: the wide divergence between countries, the health of some countries (sometimes better than some advanced countries) simply mean that it does not make sense to view the “emerging world” as a whole, as a block, but as well-defined, specific and homogeneous ..