Most of our risk metrics suggest a continuation of the benign risk environment with key measures such as volatility and correlations being supportive of risk taking. However, assessing these measures in isolation may not give the full risk picture given that we have entered a period of greater uncertainty. While the macro-economic and monetary policy background remains broadly supportive, the mid-year outlook from the BlackRock Investment Institute highlights increased longer-term uncertainty. Moreover, the recent lacklustre performance of many risk assets against the backdrop of rising rates may be indicative of gradual changes in required risk premia. Coupled with some valuation risks that we see emerging in parts of the market and increased geopolitical tensions, our assessment of the risk environment is less positive than in previous quarters.