A healthy global recovery?

In recent months we have seen some optimism out of many market participants. Here are some of the main reasons that stick out to me:

• US: tax cut extensions, hinted more QE and extended lower rates, improving data including jobs market.
• Europe: closer to an orderly Greek resolution, some decisions made on how to move forward with greater fiscal integration, ECB pumping liquidity into the system as well as slightly improved data.

Despite all this, the global outlook still seems gloomy and global forecasters such as the IMF continue to cut forecasts for 2012 and anticipate a double dip in Europe. These are in my eyes three key determining factors that will play out in 2012, no-one knows what the outcome will be:

• Political clashes such as elections all over world.
• The capability of Europe being able to pull together to sustain stability and further integration.
• China being able to control its economy and keep a healthy global demand (a light at the end of the tunnel).