May's Market Outlook

Sovereign risk takes centre stage again but this time there is less contagion: the US and emerging economies find refuge in a more favourable cyclical position.

The market is beginning to penalise the “austerity trap”: a shift in focus is needed – to change the message from fiscal consolidation to a recovery in growth.

Despite attractive valuations on most stock market indices, the risk premium must at least start to return to normality in order to provide more consistency to this asset’s benefits.

For May's Market Outlook, please click here.