Global financial markets are ignoring indications there will be economic turbulence in the months ahead, BCA Research warns.

The research firm reports that equity market implied volatility is at a low level in many markets, including the United States and Germany, with investors exhibiting confidence that healthy growth and low inflation will prevail in the global economy for some time to come. This optimism is also reflected in emerging market sovereign bond spreads, which are at historically low levels, it notes.

However, complacency about the outlook for the global economy “appears increasingly dangerous given headwinds to growth,” BCA cautions.

“Rising oil prices, extended housing markets and [U.S. Federal Reserve Board] tightening indicate that investors should be wary of greater financial market turbulence in the months ahead,” it warns. “As Fed Chairman [Alan] Greenspan stated last week: ‘ … history has not dealt kindly with the aftermath of protracted periods of low risk premiums’.”