January was a month in which it seemed each of the major hurdles were dealt with one by one, at least for now. After the partial resolution of the fiscal cliff early in the New Year, US lawmakers continued the theme of temporary measures by extending the debt ceiling with conditionality to May ahead of further negotiations for a more lasting solution. US earnings season has nearly concluded, with results broadly in line with historical averages, while further evidence of China’s soft landing emerged with the release of Q4 2012 real GDP growth figures. Global equity and bond markets responded as expected. Stock indices across the world generally recorded strong gains, highly rated sovereign yields also edged higher while those in peripheral European nations continued their march downwards. Despite the positives, markets reminded everyone it is hardly smooth sailing ahead. European equities gave up some of their gains later in the month as corruption allegations against the Spanish Prime Minister gained traction and support for Silvio Berlusconi in Italian pre-election polls jumped.
