Capital Markets 2011-2012: Looking Back, Looking Forward

Capital Markets Outlook

As we reflect on 2011 and try to predict what 2012 will hold for capital markets in Canada, we are faced with the undeniable fact that the only identifiable "certainty" for the near to medium term is continued uncertainty and a degree of volatility. Debt levels remain high across the OECD and sovereign debt continues to be a risk to GDP growth in the European Union and the United States. A slowing economy in China represents an additional risk to global growth. However, the general view is that Canada's fiscal situation remains comparatively strong in this environment.

On a macro-economic level, inflation has been trending downward in most OECD and BRIC nations. Interest rates remain at historically low levels with indications being that they will remain so for several years. Equities on major exchanges have maintained relatively low valuations and the situation in Europe is expected to keep the Euro under extreme pressure with the future