Janus Henderson’s US-based Multi-Asset Solutions Team present their latest Tail Risk Report, using options market prices to infer expected tail gains and losses for each asset class.

Key takeaways:

  • Signals based on options market pricing continue to suggest that inflation could rise from the current dormant state. We see a greater risk of inflation moving higher rather than lower.
  • US wages continues to grow at an annual pace of 3%, and home refinancing activity and consumer spending have picked up while excess reserves held at the US Federal Reserve continue to fall. This could lead to a pick up in the velocity of money and in turn, prompt inflation.
  • The team believe that global equity attractiveness is below average levels, with the UK representing a large negative outlier.

Please click on the link to access the document.
Tail Risk Report