Talking Points:
• The risk revival has continued into the new week, but conviction is far more uneven and restrained
• G-20 meeting concludes to review of downgraded GDP, warning of financial risks and reality of volatility
• Event risk fills out ahead, with UK inflation figures the top listing
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The S&P 500 picked up the bid it closed out on Friday, but it would also mirror its tepid pace. The risk appetite climb is running low on conviction, and some outlets for speculative appetite - like Emerging Markets - have broken with the trend. Not only are we heading into significant resistant on the various benchmarks for 'risk', but we are coming off a period that has been rife with warnings for building up exposure. Last week, the IMF downgraded growth and listed major reasons for concern for financial stability. The G-20 central bank governors and financial ministers reiterated similar concerning trends after their own gathering. There was also a notable shift in global policy standings that seems to suggest a desire for the Fed to just rip the bandaid off and get the first rate hike out of the way. These developments will not easily vanish into complacency. Instead they will color risk positioning going forward amid scheduled event risk. We look at the themes, event risk and trading currents in today's Trading Video.
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