Editorial

The financial markets are still in suspense over the developments in the sovereign debt crisis in the Eurozone. Although the political desire to preserve the single currency has been clearly stated, action is a long time coming. Things will remain uncertain because investors will continue to question Italy and Spain's ability to pull themselves out of their budgetary rut. We have reduced our exposure to risk assets and do not expect to see a recovery in the equities markets whilst profit forecasts continue to be revised downwards. Conversely, corporate bonds are still attractive, upheld by flexible monetary policies and extremely solid balance sheets.