A Global Macro Risk Dashboard
- Risk #1: Recent intensification of trade wars is threatening to undermine a nascent global recovery
- Risk #2: Equity and credit markets reflect no rush for exit, but rates markets are sounding alarm
- Risk#3: FX volatility is on the way up, particularly in emerging markets
- Risk #4: USD funding conditions are orderly, but not as comfortable as they were in early-2019
- Risk#5: Our key concern is credit markets in China and the U5, given the substantial debt burdens
Note: The three-coloured speedometers above represent our conclusions on the outlook prevailing in various markets, as reflected in growth data, pricing, spread, and valuation metrics charted in the attached publication. The composite score is an unweighted aggregation of the nine sub-categories highlighted above. Note that bullish fixed income sentiments do not necessarily imply a positive outlook, although periodically they do. At the current juncture, negative government debt yields in Europe and very low yields in the US reflect very comfortable borrowing conditions, but they are likely in response to a weakening growth outlook (i.e. the outlook is red).
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