ESMA sees continued high market risk amid deteriorating economic fundamentals
The European Securities and Markets Authority (ESMA), the EU’s securities regulator, today publishes its latest risk dashboard for the European Union’s securities markets, covering the third quarter of 2019.
The market risks remain very high, against the background of a deteriorating growth outlook, continued uncertainty around Brexit, US-China trade tensions and geopolitical risk. Large intra-day movements confirm that markets remain sensitive to the news flow.
Risks in markets under ESMA’s remit remained high, particularly in securities markets, where high asset valuations and search-for-yield prevail.
Credit risk continues to be elevated, with deteriorating corporate debt quality and the growing share of BBB-rated debt as main concerns.
Looking ahead, a weakening economic outlook, further uncertainty over global trade negotiations, as well as uncertainty around the Brexit timeline remain key risk drivers.
