Last quarter we discussed how markets seem to have decoupled. That has continued in Q4 as risk rose in the US (now among the riskiest markets but just around its long-term median) but was flat or fell in others.
In Q3, risk rose slightly in the US, somewhat more in Emerging Markets, Japan and Australia, and substantially in China and Asia ex-Japan.
Inflation shock boosts Bund yields: Dollar falls over disappointing jobs data—but stocks continue to climb: Lower equity volatility reduces portfolio risk.
Risk fell again across most indices in Q2 – US short horizon risk finally retraced its path back to where it stood before the 2020 crisis. Almost all components of risk contributed to the decline.
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