"I researched what this index is purported to reflect. It is stated thus: "measure risk aversion in global financial markets."

"Do you think its current low reading in an otherwise weak equity environment may reflect complacency somewhere else such as fixed income?"

David Fuller's view Thanks for your question and the chart above. It is always interesting to see what subscribers create in the Library.

I can only guess as to the answer but I agree that there is widespread complacency regarding so-called 'safe-haven' western government bonds and JGBs. To the extent that MRI reflects stock market risk, I do think people were somewhat complacent near the recent highs.

However, on a medium to longer-term basis I maintain that the crowd was too pessimistic, variously fearing a 'break-up of the euro, a depression or hyperinflation in the USA' and 'a collapse of China's economy.'

There is no shortage of legitimate economic concerns, but once again, the world seems to be muddling through.