This week’s tragic events in Brussels had an only temporary impact on Risk sentiment, which has been reflected in our risk index remaining broadly stable. This may not come as a major surprise as geopolitical tensions are generally not treated as sustainable market drivers. Nevertheless, caution may still be warranted, especially as markets under-price the risk of the Fed hiking twice this year.

Should next weeks’ US data make a case of further normalising investors’ central bank rate expectations to the benefit of the USD, investors’ demand for risk assets may fall, at least temporarily.