Despite some positive news on trade (i.e. the US-China “phase one” trade deal), diminishing concerns of a no-deal Brexit and the continuation of accommodative monetary policies across the globe, the projected recovery is uncertain and the risks to the global economy remain on the downside.
Geopolitical risks, as well as a likely intensification of trade tensions, could decrease confidence in international markets, increase risk aversion and worsen financial conditions, especially for the most vulnerable emerging market economies. Stressed valuations in a number of assets in certain jurisdictions according to some benchmark metrics also add to the risks of a possible correction.