Developed central banks reiterate focus on low interest rates

ASSET ALLOCATION

Equity markets rallied strongly over the first quarter of 2010 with the MSCI World Index up by 4.8%.

More importantly, central banks in developed economies reiterated their commitment to keep interest rates at extremely low levels, maintaining a low opportunity cost to invest in riskier assets like equities and credit bonds. But despite the improvement in economic activity, equity markets remain vulnerable to a correction. Disappointing readings for consumption and unemployment in developed economies, as well as concerns monetary tightening could be accelerated in major emerging economies, could lead to greater caution from investors. Estimates for 2010 corporate earnings growth remain ...