What are investors concerned about for the euro zone?

Since late 2018, investors have been very wary about the euro zone: they are selling euro-zone equities and have taken a significant short position in the euro. So what do investors fear and what is their concern as regards the euro zone? Do they fear a recession in the euro zone? This would be consistent with the fact that they are selling equities and buying bonds (mainly sovereign) in the euro zone, and with the parallelism between the sales of equities and the growth outlook (PMI) for the euro zone; Do they fear a political crisis in the euro zone (another political crisis in Italy, strong presence of nationalists in the European Parliament, disagreements between France and Germany)? When we look at investors’ behaviour towards the Northern euro-zone countries (Germany, Netherlands, Belgium, Austria, Finland), which ought to serve as a safe haven in the event of a political crisis, we see that they are also sellers of equities from these safe-haven countries. Do they fear a break-up of the euro? We should then see a major divergence between investors’ position towards the core and towards the peripheral euro-zone countries. That is not the case. All things considered, the most likely cause of investors’ wariness towards the euro zone is the fear of a recession . .