Economic risks have shifted to the downside in Europe

German Chancellor Olaf Scholz is facing a February election.

While much attention has focused on the potential impact of President-elect Donald Trump on the Eurozone economy, the continuing uncertainty around European politics and fiscal policies has also weighed on the euro and local equity markets recently, alongside the continuing “Trump trade”. 

In particular, the expected dissolution of the German Government brings yet further political uncertainty, following the summer elections in France and the European parliament.