Analysis

While the outlook for the market remains uncertain, the US recovery is showing clear signs of progression.

We believe some dividend forecasts for 2010 may be too high.

Corporate bonds have recovered strongly over the last 12 months and we believe the recovery has further to run, albeit at a more moderate pace.

While it is undoubtedly premature to prepare the obituary for European monetary union, the financial downturn of the past few years has mercilessly exposed its inherent flaws.

The global recovery is well in line with forecasts for 2010, 2011 and 2012 looking for growth of around 4% in each year.

Following the sharp market rally of 2009, emerging markets have experienced something of a flat start to 2010 in sterling terms.

Since the start of the year, sterling has weakened materially against the US dollar, and slightly against the euro. For owners of UK equities this is a mixed blessing.

Following the strong performance demonstrated by most main risk assets during 2009, the start of 2010 saw volatility return to the markets.

Management teams of US companies appear to be in wait-and-see mode as they can still see several hurdles the economy needs to get over in order to ensure future growth.

The near-term outlook for sterling credit continues to look positive, encouraged by an increasingly robust corporate sector, a slowly improving economy, and a favourable market environment.