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1.Market Observations, 8.Was Sticky

28 Oct 2017 (AFR) – Investors fret, but the ‘Icarus trade’ flies ever higher

(28 October 2017, AFR, p29, by Patrick Commins)

‘This week we have been greeted with a new way to measure the complete lack of worry in global markets. The US Office of Financial Research has put together a snapshot of stress in global financial markets. The “Financial Stress Index” is constructed from 33 variables, such as yield spreads, valuation measures, and interest rates. The OFR FSI is positive when stress levels are above average, and negative when stress levels are below average. Right now, the index is reading -3.75, its lowest since the GFC when it peaked at 26.4 in October 2008. The low for the FSI was in early 2007 when it pushed below -5. Since 2000, it have averaged 0.8.’

Read more at (might need AFR login access, or try:

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