Europe's economy looks to be on the cusp of recovery - a potential support for the region's lagging risk assets. Yet, there is a key risk to our base case: trade tensions between the U.S. and Europe may heat up again. We would expect the direct economic fallout to be manageable, but it could have outsized market impacts.
Chart of the week
BlackRock Geopolitical Risk Indicator for global trade tensions, 2005-2019
Sources: BlackRock Investment Institute, with data from Thomson Reuters, April 2019. Notes: We identify specific words related to this risk and use text analysis