The resilience of financial markets to geopolitical risk

Geopolitical risk is very high today: risk of conflict between China and Taiwan, war between Ukraine (supported by NATO) and Russia, war between Israel and Hamas. It is surprising that this high geopolitical risk has no visible effect on equity markets, or on the degree of risk perception in financial markets, especially as this low level of risk perception is accompanied by a lack of reaction by stock market indices to the sharp rise in real interest rates. Financial market participants have clearly chosen to ignore geopolitical risk.