We see sufficient indications which support our view that growth will pick up in the second half of the year.

## Upturn in US labour market is accelerating


## Markets display remarkable stability

Summer has arrived, the World Cup is over and markets are fairly calm. No better time to go on holiday, lie on a beach and relax. Or is it?

In spite of the low volatility on the markets and the remarkable stability in the macro-economy and investor behaviour, many investors are becoming concerned about just that: the suspicious degree of stability in the system. They are wondering what hidden dangers are lurking. These concerns can logically be explained by the fact that the current stability can contribute to future instability (due to over-confidence and leading to taking excessive risks). At the same time, it is clear that these periods of stability can persist for months or even years.

The transition from low to high volatility often requires a trigger. Yet there are no obvious triggers lurking this summer. Of course, things can always go wrong or unexpected shocks can occur, nothing is more certain than that, but compared to the ‘hot’ summers of credit crises, sharp commodity price hikes, euro crises and yawning budget gaps of recent years, the outlook for this summer is relatively positive.

One potential risk is the summer drought in market liquidity. The current low levels of volatility in the markets correspond to low trading and liquidity levels in almost all sections of the global markets. A minor trigger or change to investor behaviour could cause a significant market correction, as even a relatively small number of investors can affect pricing. However, we see no reason here to amend our risk-on positioning.