Global weekly: Markets pause

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The rally seen since mid-February is taking a breather, as concerns over China, oil prices and political risks prove enough to bring it to a temporary halt.

The rally in stock markets that has been underway since mid-February has paused, overtaken by concerns regarding China and oil prices. It had been supported by a delay in rate hikes by the US Federal Reserve and the additional easing of the ECB’s monetary policies.

ABN AMRO Group Economics continues to call for modest but positive global growth, and signs of stabilisation are seen in both the manufacturing and services sectors. While firstquarter growth in the US is expected to be weak, the evolution of equity markets should be in line with the unfolding recovery.

Political risks are attracting increased attention. This week the Greek debt crisis flared up, Portugal is facing a possible credit downgrade at month-end and Spain needs a new government by 2 May or will need to hold new elections. The British referendum on staying in the European Union is coming in June. With the earnings season starting in the US next week, there is more than enough for markets to chew on.

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