A Broad but Still Tentative Turn in Risk Via Stocks, Oil, Yen

Talking Points:

• General sentiment is one of the most productive influences on the market when active
• This past session, the slip across a range of risk-oriented assets suggests a faltering in the recent sentiment swell
• Assessing opportunities in this theme should fall to the tracking of sentiment via market correlations

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How do we gauge the conviction and influence of 'risk appetite versus risk aversion'? This is a common theme in DailyFX videos and articles, but my favored measure of this big picture fundamental drive is the correlation across otherwise independent markets. Equities, high-yield, emerging market, carry, commodities and other distinct assets have few points of common crossover - but investor sentiment is a universal force. That said, it is notable that the range of markets I follow on a macro level put in for a collective turn after gradually climbing for weeks. Is this the start of a definitive shift in speculative ambitions? What momentum should we expect from this move given the event risk ahead? Where are the risks and the opportunities? We focus on the sentiment theme for current conditions and tracking moving forward in today's Strategy Video.

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