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The 12 most important
markets (8 developed and 4 emerging markets) combine over 80% of
total global GDP. Whatever happens in these markets on a stand-alone
basis, will impact a whole region and/or the other side of the world.
The stress indicators focus on these 12 markets. |
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Globalisation is
irreversible. Political and economic decisions in one part of the
world impact trading partners and markets on the other side of the
world. The stress indicators focus on changes in merchandise trading
patterns, capital flows, risk premiums, spreads and so on. |
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Global central bank
dependencies and more harmonised market regulation (Basel III/Solvency
II) synchronises market behaviour, especially during times of stress |
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Correlations between
markets and regions are high, especially during a financial crisis.
The “ALL IN or ALL OUT” signals focus on markets that
are highly integrated. |
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History repeats itself
and is a reliable indicator. |
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