We recently introduced our Risk Barometer. It uses risk measures across various markets to determine whether markets are in ‘risk aversion’ or not. This would help indicate how defensively to position oneself – for example by liquidating risky positions like equities or credit. Two weeks ago, the Risk Barometer was signalling ‘risk neutral’. The question is, after recent equity weakness has the signal changed? Well, the short answer is ‘no, but…’.
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