Financial markets are gradually recovering after a busy week. New militant statements from the Bank of China and Donald Trump is not received. Well, the attacks of the owner of the White House on the excessively "hawkish" policy of the Fed are perceived by traders as an increase in the likelihood of a rate cut in September. Investors for the most part digest the information received and study the opinions of experts on the recession in the United States

Wall Street Journal respondents increased the chances of monetary policy easing at the next FOMC meeting to 63.9% from 49.8%. The risks of a recession in the US economy over the next 12 months are estimated at 33.6% against 30.1% in the last survey and 18.3% a year ago. It is worth noting that the recent figure is the highest since 2011. In Bloomberg, the probability of a recession on the 12-month horizon is raised to 35% from 31%, and Reuters estimates the chances of a recession over two years at 45%.

The US economy at the end of this year will grow by 2.3%, according to Bloomberg respondents. Previously, it was about an increase of 2.5%. In the third quarter, GDP growth will slow to 1.8% from 2.1%. The world economy, according to the news agency, will expand this year by 3.2%, rather than 3.3%, as previously expected.

So, everything is clear with America. As for the eurozone, if the region's economy were not as weak as it is now, the euro would have attacked long ago. But there is no question of this, because the health of German exports and industrial production, undermined by trade wars, spoils everything. The German economy clings to the service sector with all its might, but the leading indicators are inexorable – they begin to warn of a recession. We need a fiscal stimulus, as the expansion of the monetary system will further complicate the difficult fate of the banking system.Reducing the ECB rate to -0.5% will increase the costs of banks associated with the service of negative rates by 60%, Bloomberg estimated.

Information leaked to the network that Germany is seriously discussing the possibility of a stimulating budget policy has pushed the yields of German government securities up. If official Berlin really decides to do this, then the euro will have some anchor of salvation, able to help the "bulls" on EUR/USD to finally go beyond the range of consolidation of $1.1175–1.1245.

Moment of truth for Italy

On Friday, the euro won back most of the losses recorded on Thursday, caused by the new political crisis in Italy. The leader of the "League" Matteo Salvini announced the collapse of the ruling coalition in the country and called for new elections to strengthen his power. The most striking reaction to the news was in the stock and bond markets, where there was a large-scale sale of Italian assets.

Salvini complained about the absence of a majority in Parliament and pointed to the need to "get rid of uncertainty." Italian Prime Minister Giuseppe Conte is going to announce a vote of no confidence.

Time is short

According to sociologists, 62% of Italians would like to see Salvini as Prime Minister. Early elections are expected to take place in October, and negotiations may then be needed to form a new coalition, possibly with the brothers of Italy, another far-right party. Despite Salvini's popularity among voters, he may need a partner.

The right-wing government is likely to be more organic than the "hodgepodge" of the 5-Star Movement, which has ruled Italy for just over a year. The new authorities will take a tough stance on immigration, and the conflict with the EU, apparently, cannot be avoided. At the same time, the costs of infrastructure projects blocked by the representatives of the "Five stars" can be expanded. Meanwhile, numerous contradictions that have undermined the coalition will reappear on the surface. The "League" is split into eurosceptics who advocate Italy's exit from the eurozone, and a more pragmatic faction that supports tax cuts and compromises with allies.

Undoubtedly, Salvini managed to keep these two camps together, but only because he did not have to take full responsibility for what the current government is doing. Now, this time is running out.

If a new general election is held and Salvini wins, the League will have to demonstrate its true position after several years of generous promises. For Italy, the moment of truth is coming.