ANZ has released a great chart this morning on global 'risk appetite' which reflects whether traders and investors are bullish or bearish on stocks and the...

Joanne Ma

ANZ has released a great chart this morning on global 'risk appetite' which reflects whether traders and investors are bullish or bearish on stocks and the economy. The chart reveals that developed market risk appetite is strong while emerging market risk appetite is recovering strongly. This means investors are taking money out of safer markets - like US Treasuries and Japanese yen - and placing it into assets that are leveraged to global growth and risk (e.g. Aussie dollar, Brazilian real, South African rand). Stock markets in general benefit in an outright sense in this environment. Within stock markets, however, smaller and more speculative stocks usually outperform the large caps as a rule of thumb. Bullish sentiment like this tells us why, in the midst of the US Government shutdown and debt standoff, global stocks and the Aussie dollar have held up reasonably well. (VIEW LINK)


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