The FT has developed a new geopolitical sentiment model by using an LLM that identifies positive and negative stories, which are then weighted by relevance. This model is correlated to some other geopolitical models, but with a weekly frequency, it may provide a better estimate. The intuition is reasonable and consistent with actual events in 2025. For quant, it would be nice to see that this adds value in telling us the direction of market risk premia.
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