Editorial

The markets remain frozen, still awaiting after so many disappointments a credible European solution to the continent's debt crisis. The risk of another financial system collapse has grown since September with the European crisis spreading to the EU’s ‘safest’ countries. The hope now rests with Europe reacting appropriately, before time runs out, especially as regards the ECB, which appears to be the only viable line of protection. Against this backdrop, we maintain an allocation to defensive assets, consistent with a level of risk and volatility that remains high.