We have reviewed our key market forecasts in light of a change to our assumption about the timing of an EMU break-up. The new numbers are presented in the table on the next page. There are four main changes. First, we expect the euro to fall more quickly against the dollar. Second, we foresee more underperformance of German Bunds relative to US Treasuries and UK Gilts. Third, we think euro-zone equity markets will weaken further. And fourth, we anticipate emerging equity markets will do a little worse than the US equity market next year, but then more than recoup lost ground the year after.
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