The BofAML global survey involving 171 fund managers, holding $443 billion in assets, showed that the asset managers are wary of following risks.

• According to the fund managers’ survey, EU disintegration is the biggest risk prevailing in the financial markets. However, the perception of the risk is down in October, when compared to September survey.
• A new risk has been added by the fund managers and that is the crash in the bond market or rise in the credit spreads. We at FxWirePro have been warning of this for quite some time now. According to us, lending debt-burdened government at negative rates is riskier than currently assumed. It is now considered as the second biggest risk prevailing, according to the survey.
• In September, the second most considered risk was the win by Donald Trump but that has now subsided to the third position, probably because Hillary is ahead according to polls.
• Inflation in the United States is once more back in the focus. We have been warning on this too. However, despite the perception, the threat of inflation is still low but that we expect won’t be the case for very long. It would also be a key factor in the bond spread as well as tapering, which is the fifth most widely considered risk.
• Interestingly, China’s devaluation that occupied the fourth place in the risk matrix in September has now subsided to the seventh position.
• Defaults in European banks are now sixth most widely considered a risk to the financial markets.

Other tail risks considered by the fund managers are Helicopter money, win by Hillary Clinton and global terror. Interestingly, Geopolitical tensions didn’t make it to the list. However, we at FxWirePro are very worried on that front and feel that similar approach of the Obama administration by the Democrats, if Hillary wins would exacerbate it.