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.