Risk-On
A market sentiment regime where investors favor higher-risk assets — equities, high-yield credit, commodities, and EM — over safe havens.
Risk-on describes a broad market environment where investors are confident and willing to take on risk. Capital flows toward equities, high-yield bonds, commodities, emerging market assets, and cyclical currencies (AUD, NZD, NOK). Safe havens like Treasuries, the dollar (in some regimes), yen, and gold are sold off or underperform.
Risk-on regimes are typically associated with positive growth surprises, dovish central banks, low volatility (low VIX), and tightening credit spreads. Recognizing the prevailing risk-on/risk-off regime helps traders align positions with the dominant macro current rather than fight it.
Related Terms
Business Cycle
The recurring sequence of economic expansion, peak, contraction, and trough that drives sector rotation, earnings cycles, and asset class returns.
IntermediateConsumer Confidence
A survey-based measure of households' optimism about the economy — a leading indicator of consumer spending, which drives ~70% of U.S. GDP.
BeginnerDovish
A monetary policy stance favouring lower interest rates and easier financial conditions to support growth and employment — the opposite of hawkish.
IntermediateRisk-Off
A market sentiment regime where investors flee to safety — selling equities and high-yield assets in favor of government bonds, gold, and haven currencies.
BeginnerSoft Landing
The ideal macro outcome: the central bank tames inflation through rate hikes without triggering a recession — rare but market-moving when achieved.
Intermediate