Investment Outlook - Eurozone Worries Continue

Political uncertainty and increasing resentment towards austerity policies across Europe further risks financial stability.

After an impressive five-month rally fuelled by signs of improving economic data in the US and hopes a new eurozone crisis might have passed, financial markets have stalled in recent weeks with worries about the eurozone returning to the forefront of investor concerns. The release of several key first quarter GDP figures in April seemed to confirm what markets were beginning to fear: that any rebound in global economic growth will be more anaemic than many had begun to hope. Growing resentment towards 'austerity' policies is meanwhile leading to heightened political uncertainty across Europe and creating new risks to financial stability. With the effects of the European Central Bank's (ECB) liquidity tap now beginning to run dry, equity markets have lost momentum over the past month while volatility has increased somewhat, although it remains