The European economy continues to fight weak growth prospects as Germany drags down the block's momentum and as the ECB's benchmark interest rate is expected to remain at record highs for longer. However, one thing the central bank has not needed to worry about were systemic risks to its financial markets. The euro risk premium - difference between Italian and German yields - has fallen to its lowest level in 27 months, the ECB's systemic risk index remains near record lowest and multiple regional equity benchmarks sit comfortably at all-time highs. The resilience of European financial markets has been surprising given the severe nature of the external shocks over the past years.
Markets are not worried about Europe