UBS Global Outlook

Signs of a revival in economic activity continued to emerge throughout the third quarter, providing a catalyst for further gains in financial markets. Stabilization and improvement in the economic outlook are likely to underpin risky assets during the fourth quarter. Despite the impressive performance within financial markets since early March, valuations of most risky assets have not yet run ahead of economic fundamentals – even if we assume a rather shallow and anaemic recovery.

• Economic upturn to continue, despite structural risks
• Government bond yields to move higher
• Corporate bonds attractive despite impressive run
• Economic and earnings recovery to underpin equities
• Commodity prices have room to rise
• Carry trades and fundamentals weigh on US dollar