Markets increasingly sensitive after strong performance in early 2024

- EU financial markets face high risks due to geopolitical events and economic concerns. - Despite market calmness in early 2024, recent events have exposed market sensitivity to interest rates, credit risk, and political news. - Fragile market liquidity poses a high risk of corrections in equity and other markets. - Liquidity mismatches in the fund area, particularly in real estate, and deteriorating asset quality are risks to monitor. - Capital availability for European corporates through capital markets has been stable, with signs of improvement in IPO activity. - Corporate bond issuance declined in Q2 2024, and the upcoming maturity wall poses risks, especially for lower-quality bonds. - Green bond issuance has slowed, and sustainable funds faced outflows, raising concerns about mobilizing private capital for green transitions. - Crypto-assets markets surged in the first half of 2024, but faced volatility and declines in August. - Equity prices trended upwards in early 2024, with volatility linked to elections and macroeconomic indicators. - Credit spreads for high-yield corporates have narrowed, while their credit quality has declined, indicating search-for-yield behavior and potential underestimation of risks.