Financial markets have been dominated by worries about a fall-out from an easing of monetary stimulus. We do not think that the resulting tightening of financial conditions is sufficient to throw the recovery off course. The pace of fiscal consolidation is easing in the advanced economies, while private sector balance sheets are strengthening, especially in the US. Stronger demand in the west should give the emerging markets a lift as well. We continue to think that we are most likely on track for stronger growth in the coming months, with an above trend pace of global expansion likely to take hold next year. This means that a stronger economy should eventually underpin investor sentiment, rather than an increase in financial stress undermining economic activity.