Video: Warnings of Financial Risk are Growing Louder and Louder
Warnings of Financial Risk are Growing Louder and Louder Talking Points:
• The US Treasury issued its third annual report on risks to the financial system
• Concerns over a 'reach for yield', geopolitical tension and 'fire sales' are growing more and more common
• A healthy sense of fear and preparedness is the better strategy than actively trading against risk
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It seems that nearly every interested party in the market's health is voicing concern of rough seas ahead. The ranks of analysts, economists and money managers have been fostering a healthy sense of fear for some time. However, more recently, the dour outlook has spread to central banks (Fed, ECB, BoJ), governments (US Treasury, China, Eurozone officials) and even supra-national entities (IMF, OECD, Bank of International Settlements). If the cheerleaders for optimism are warning caution, what does that mean for the probability of a dramatic shift in sentiment for the markets? How should we approach this looming threat as active traders and investors? We take another look at the big picture of 'risk' in today's Strategy Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.