Big investors are gearing up for a potentially turbulent period in global financial markets, as a succession of key economic and political developments threatens to end recent market calm. Positioned across a range of asset classes, from gold to corporate credit, investors are eyeing volatility as a slew of unpredictable events loom.
Among the chief concerns are Thursday’s U.S. jobs report, which could reshape expectations for Federal Reserve policy, followed closely by a critical U.S.–European Union tariff deadline. Just days after, markets will contend with a high-stakes French budget vote that could further unsettle investor confidence, especially in European assets.
In an interview with Reuters, April La Russe, head of investment specialists at Insight Investment, highlighted the unique level of market risk relative to its current pricing. “I can’t think of a time in my history in markets, which is pretty long, where you’ve had so much risk and so little risk premium,” said La Russe. Her comments underscore investor concerns that markets may be underestimating the likelihood or impact of adverse outcomes.
U.S. Treasuries, the dollar, Japanese yen, and euro zone government bonds are among the instruments expected to react sharply to upcoming developments. A major concern lies in how quickly market sentiment could shift based on new economic data or surprise political outcomes, creating both opportunities and pitfalls for investors.
As markets await clarity from these events, asset managers are advising clients to adopt careful positioning, potentially hedging key exposures and preparing for a surge in volatility across international financial markets.
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