Political Economy

For now, think of Italy as a short-term risk-off trigger that has limited longer-term impact. To me, this presents a buying opportunity.

As a member of the euro area, Italy has no monetary sovereignty. The only thing keeping its debt yields low is the implicit backstop of the ECB. But because of the political turmoil, this backstop is now in question. And Italy could default…

North Korea is sometimes (hyperbolically) referred to as a Chinese client state. And this seems to be the perception that Trump has developed as well.

Since Emmanuel Macron’s election as French president in May 2017, hope has lingered that a mythical friendship between France and Germany will help complete the gaps in the euro area architecture. As this column discusses, however, history…

With Europe, when the economy turns down, that’s when the acrimony will be greatest. And that’s when I would worry about really bad outcomes.

The UK says it will leave customs union on in a year's time. But the border issue between Northern Ireland and the Republic of Ireland remains unsolved. And while the Irish border is a particularly vexing issue, there are other near-term…

The next phase in Italian politics has not been much of a market factor. Expect this phase to endure as the formation of a government should take a long time.

Many consider the US and South Korea agreement the first success of President Trump's trade strategy. We are less sanguine. We do expect other countries to make concessions to the US grudgingly. But we are concerned the US will be…

While the pundits are talking trade wars, Chinese officials are taking the latest US provocations in stride. China's emergence on the world stage was always going to be disruptive. China is not defenseless in a trade war, but many…

Two European elections – in Germany on 24 September 2017 and Italy on 4 March 2018 – warn that the peoples of Europe are drifting apart. Much of the recent deepening of these divisions can be traced to Europe’s single currency, the euro.…