Sharemarkets started 2012 with newfound confidence, largely generated by an improving trend in US economic data. Germany led the rally, with a 9.5% gain, while the US stock market got off to its best start to a calendar year in 15 years. 

The International Monetary Fund (IMF) and World Bank have provided gloomy assessments of world economic prospects, however, both significantly lowering their forecasts for global economic growth, and projecting recession in Europe in 2012.

In Australia, lacklustre retail spending, housing credit and business credit demand figures show that the late-2011 rate cuts by the Reserve Bank of Australia (RBA) are yet to kick-start the non-mining economy in a meaningful way. The RBA left rates on hold in February, when another cut was widely forecast. 

Read more in the January 2012 Investment update or check out previous investment updates.