The first 3 months of 2016 were characterised by heightened volatility across asset markets with sharp falls in risk asset prices in January and early February which reversed in late February and March. Likewise, bond yields declined sharply as risk assets fell before stabilising / rising in conjunction with the recovery in risk assets. The behaviour of markets during the March quarter is broadly symptomatic of a bigger problem – namely that no one’s really sure as to where to next – for either the global economy or for markets. In part this has been fuelled by the news flow which has had something for everyone. The economic “bears” have been able to promote the de-synchronization of the major global economic blocks, tepid US consumption and jittery central banks. The more “bullish” (note it is hard to find outright bulls), have ample support from a continued solid US labour market and aggressive policy stimulus from the ECB, BOJ and China. While uncomfortable, we probably sit in the middle. We discuss this further in “Real Matters – Best Avoid Landmines” (VIEW LINK)