Direct effects of the trade war are contained. More serious is the collateral damage on confidence.

Worsening French fundamentals should bring France more in line with Italy. Accordingly, some convergence between the French and Italian government bond yields may be justified.

Inaccurate economic forecasts have deeper reasons than just uncertainty about the future. However, the incentives for this are quite different for companies on the one hand and for macro experts on the other.

The stocks of sovereign debt held by banks especially in countries with vulnerable public finances and weaker banking systems have increased of late. Either could a further deterioration of public finances cause a banking crisis or growing problems i ...

Were TLTROs to expire or become more expensive, the interest margins of banks – especially in Southern Europe (Italy and Spain) – would be negatively hit and the credit impulse would weaken.

Italy escaped the EU excessive deficit procedure for now because the Italian government has curbed the three main electoral promises by underestimating the costs of the planned measures.