## Figure 1.3. Reflation and Market Optimism

## Source details

**Canonical URL:** [Figure 1.3. Reflation and Market Optimism](https://www.imf.org/-/media/files/publications/gfsr/2017/april/chapter-1/figure1-3.pdf)

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- [Markdown version](/-/media/files/publications/gfsr/2017/april/chapter-1/figure1-3.pdf.md)
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### 1. Consensus Forecasts for End-2017 U.S. 10-Year Treasury Yield (Probability density)
- Panel indicator values along the horizontal/vertical scale (as provided): 0.81.21.62.02.42.83.23.64.0
- Vertical axis label shown: Percent
- Horizontal axis tick labels shown: –80, –60, –40, –20, 0, 20, 40
- Time markers on the chart: Jan. 2016, Apr. 16, Jul. 16, Oct. 16, Jan. 17, Apr. 17
- Comparative periods identified in legend: After U.S. election (Mar. 31, 2017) and Before U.S. election (Nov. 6, 2016)

### 2. Ten-Year Inflation Compensation (Cumulative breakeven yield change in basis points)
- Summary statement: "... and hopes are rising for reflation across advanced economies ..."
- Assets/series listed:
  - U.S. Treasuries (10-year)
  - German Bund (10-year)
  - JGB (10-year)
  - EMBI global (yield)
  - GBI-EM (yield)
  - S&P 500
  - S&P 500 financials
  - Euro Stoxx 50
  - Euro STOXX financials
  - Japan equity
  - MSCI EM
  - China H-shares
  - Mexico equity
  - EU high-yield
  - U.S. high-yield
  - EM high-yield
  - EU investment grade
  - U.S. investment grade
  - EM investment grade
  - VIX
  - V2X
  - China H-shares (listed again in source)
  - Mexico equity (listed again in source)
  - U.S. 1y10y swaptions
  - EU 1y10y swaptions
  - Japan 1y10y swaptions
  - MOVE
  - EURUSD 6-month
  - USDJPY 6-month
  - USDCNH 6-month
  - USDMXN 6-month
  - Commodity index
- Categories by color/legend labels in source: Rates, Equity prices, Credit spreads, Equity volatility, Rate volatility, FX volatility
- Period comparisons called out in legend: September 30, 2016; March 31, 2017; Range between September 30, 2016, and March 31, 2017

### 3. Financial Market Risk Dashboard
- Summary statement: "... generating market optimism and a compression in volatility across a number of global markets."
- Dashboard scale values shown: 0.0, 0.5, 1.0, 1.5, 2.0
- Country markers on one sub-chart: Germany, Japan, United Kingdom, United States
- Numeric axis values visible in one sub-chart: 60, 80, 100, 120
- Note on panel 3: "In panel 3, each marker is a 30-day moving average of daily percentile rank in relation to the asset’s three-year history. Closer to red represents higher prices and interest rates and lower spreads and volatility, and closer to blue is vice versa."
- Definitions/acronyms in source note:
  - EM = emerging market
  - FX = foreign exchange
  - GBI = Government Bond Index
  - JGB = Japanese Government Bond
  - MOVE = Merrill Lynch Option Volatility Estimate (a yield curve-weighted index of the normalized implied volatility on one-month Treasury options)
  - MSCI = Morgan Stanley Capital International
  - V2X = Dow Jones Euro STOXX 50 Volatility Index
  - VIX = Chicago Board Options Exchange Market Volatility Index

### Key dates and comparisons highlighted in figure
- September 30, 2016
- March 31, 2017
- November 6, 2016 (before U.S. election referenced)
- March 31, 2017 (after U.S. election referenced)

*Sources: Bloomberg L.P.; Consensus Economics; and IMF staff estimates.*

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_Source: https://www.imf.org/-/media/files/publications/gfsr/2017/april/chapter-1/figure1-3.pdf_