Market volatility, yields and bond spreads have risen significantly as a result of the Russian invasion of Ukraine and subsequent sanctions against Russia, said the European Securities and Markets Authority (ESMA) in its second Trends, Risks and Vulnerabilities Report 2022, published on Thursday 1 September. In addition, uncertainty remains very high, given the normalisation of monetary policy, the Russian invasion of Ukraine and the ongoing lockdowns in China due to the Covid-19 pandemic.
ESMA also noted that the value of equities fell, while the value of commodities rose.
Going forward, the confluence of risk sources will continue to create a very fragile market environment, ESMA warned. It therefore advises investors to prepare for further market corrections.
Consumer sentiment regarding the development of the economy has also worsened given the uncertainty and geopolitical risks. Inflation could have a negative impact on many. Household savings have fallen from the peak achieved during the pandemic.
The value of crypto-asset markets has fallen by more than 60% in the first half of 2022 from an all-time high in 2021.
Looking at the positive side, the fund sector has shown resilience and sustainable finance has been largely spared.
To consult the ESMA report: https://aeur.eu/f/2xy (Original version in French by Anne Damiani)