The twin shocks of prospective tightening by the Fed and a hard landing in China appear to be suppressing the “risk-on” environment, which normally involves a mix often called the quartet — long the riskier equities and commodities, and short Treasuries and the dollar. This year, however, commodities have declined, the dollar has been robust and Treasuries initially rose then dropped in early May, about three weeks before stocks nosedived.
Risk On Risk Off