The outlook for the world economy continues to strengthen, particularly in the formerly moribund eurozone, and it provides greater support for growth-oriented assets. But valuations remain expensive across all asset classes...

World equity markets have continued to recover from their North Korea related setback in August/September. Income-oriented asset classes (property, infrastructure) have lagged as the prospect of higher bond yields draws nearer.

World financial markets have become less concerned about North Korean risk. Equities have largely recovered from previous setbacks, and “safe haven” buying of government bonds has eased back.

World equity markets — despite a setback at the outbreak of acute tensions over North Korea — have continued to make progress as the world economy continues to improve...

Two trends are setting the agenda for asset prices. One is the ongoing global economic expansion: Recent data suggest the outlook has improved a bit further, and equities are likely to continue to benefit. The other, however, is the prospect of less supportive monetary policy...