How to Trade the Impact of Politics on Global Financial Markets
HOW TO TRADE GEOPOLITICAL RISKS – TALKING POINTS
- The global economy is showing increasing weakness and fragility
- Eroding economic fortitude exposes markets to geopolitical risks
- Examples of political threats in Asia, Latin America and Europe
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ANALYZING GEOPOLITICAL RISKS
As 2019 continues to unfold, political risks are growing increasingly relevant to watch as their capacity for inducing market-wide volatility is significantly expanding. Globally, liberal-oriented ideologies – that is, those favoring free trade and integrated capital markets – are being undermined by nationalist and populist movements. The result – though not always – is violent volatility stemming from uncertainty.
Against the backdrop of a slowing global economy and central banks pausing or reversing their rate-hike cycles, the introduction of additional uncertainty will likely create even more volatility. What makes political risk…