Markets too complacent

Since late last year risky assets have seen a sharp rally, influenced by improving economic data and not least the ECB’s massive injection of liquidity through its 3-year LTRO in December. Global risk perception has softened across assets, taking our proprietary risk aversion indicator, the Nordea Risk Perception Index, to a lower level than just prior to the Lehman bankruptcy in September 2008.

However, considering the macro risks hanging over the global economy, U.S. Chief Analyst Johnny Bo Jakobsen and Euro area Chief Analyst Anders Matzen argue that markets may be too complacent.

They see at least four downside risks that could materialise this year, undermining global growth and eventually negatively affecting investor confidence and market valuations of risky assets.

• The US: the mother of all fiscal tightening.
• The Euro-area economy and politics could turn much less benign over the coming months.
• Risk of a hard landing in China.
• Risk of a new oil price shock.

Latest research

Hawkish comments and demand for RUB offset oil market dynamics

Published date: 22 May 2013 | Analyst: Dmitry Savchenko

RUB retreated yesterday as oil market turned around and declined slightly. Brent futures dropped below $104 /bbl., as data showed a surprise jump in U.S. gasoline stockpiles. However Russian currency has strong support these days given robust RUB purchases ahead of tax payments. Exporters help…

Euro-area growth forecast update – slow for longer

Published date: 22 May 2013 | Analyst: Holger Sandte

We revise down our GDP forecasts from -0.4% to -0.8% for 2013 and from 1.4% to 1% for next year. We don’t surrender to those forecasting no growth at all also for next year. We maintain our view that the balance of risk is for ECB to keep rates unchanged.

Shipping Essentials Weekly

Published date: 21 May 2013 | Analyst: joachimbernhardsen

Macro and Events in Brief The Norwegian GDP figures came in more or less as Norges Bank expected and we therefore see no reason to change our view on Norges Bank. In the Eurozone GDP shrank by 0,2 % in Q1, still weak but a…