RORO is back: Risk On – Risk Off Resurfaces - HSBC
Research Team at HSBC, suggests that the risk on – risk off (RORO) is back.
Key Quotes
“In
the years since the 2008 financial crisis, markets have been dominated
by global forces, with local differences playing a secondary role. RORO
was the most notable of these, with its impact peaking between 2010 and
2013. As QE became an increasingly important driver of markets, RORO’s
influence started to wane.
However, this shift has reversed in
2016: At the start of the year, concerns over the Fed hiking cycle,
falling oil prices, and Chinese growth led to a big risk-off move. As
these worries have receded, markets have flipped to risk-on. RORO has
returned. Risk on – risk off is once again the single most important
driver of markets.”
