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Subject
Risk assets.
Significance
The Bank for International Settlements (BIS) warned of frothy financial-market valuations in its quarterly review on December 3. Overvaluation in several asset classes, including US equities and benchmark government bonds, in combination with monetary-stimulus withdrawal, increases the scope for a correction.
Impacts
Investors will continue to seek yield.
Robust European growth will strenghten the euro against the dollar despite worries over the progress of German government coalition talks.
Investors are worried about equity valuations, but a sustained sell-off is unlikely to occur without a sharp repricing in bond markets.
Keywords:
International,
INT,
Europe,
Japan,
United States,
economy,
bonds,
capital flows,
equities,
finance,
investment,
debt,
fiscal,
foreign investment,
growth,
private sector
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2017
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