Present indications suggest that a moderate rather than strong recovery looks the most likely scenario.

The outlook will be shaped by two key factors. On the plus side, risk assets have done well as more evidence has appeared showing that the world economy is recovering from the 2020 coronavirus hit, and the economic backdrop is likely to remain supportive as more countries make greater progress with vaccination and gradual lifting of restrictions.

Progress to date has been limited and getting to effective national-level protection will be a protracted process, but there is now a good prospect that global economic activity will gradually recover over 2021-22

Local and international equity markets continue to take comfort from the prospect of vaccinations bringing the coronavirus pandemic under control

The first coronavirus vaccinations are underway, and in many countries (including New Zealand) the economic bounceback from the initial lockdowns has been stronger and faster than earlier expected.