Investors must not get carried away with growth recovery

Not all economic indicators have turned green

The improvement in global growth over the past few months has not gone unnoticed by central banks – with several, including the Federal Reserve, acknowledging the stabilisation in economic conditions.

This has resulted in gains for risk assets, such as equity and credit markets, while core bonds have struggled. Markets are clearly full of optimism over the outlook for growth and a lot has been priced in. However, while it is true the global economy is on firmer footing, not all indicators have turned green and hard data continues to be on the soft side. Is a global recession inevitable? In the eurozone, for example, growth remains tepid across most countries. While it may feel like a victory to see European PMIs rise again, it has only been a modest improvement so far. Inv...