The outbreak of swine flu has had little impact on financial markets, even in Mexico. While not wanting to downplay the social costs or uncertainty about how the disease might evolve, we think markets are right to remain sanguine for the time being. Nonetheless, there are other reasons why investors may choose to book profits on riskier assets after their recent gains. The rally in developed equity markets seems premature, as economic recovery is still a distant prospect and valuations are not especially attractive. The outcome of “stress tests” could also put banks under renewed pressure. What’s more, a renewed fall in global risk appetite would put emerging market assets back on the ropes.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services