The global recovery is gaining strength and financial conditions are improving, however, slow credit growth and the delevering consumer remain major headwinds. We maintain our view that this is a long, slow recovery with very real risks namely soft house prices, tight credit and sovereign debt. In Australia the outlook is good, but not without risk.

Overnight the US stock market collapsed by around 9% before regaining ground to close down 3.2% for the day.  This leaves the US market down around 7.5% since its recent high on the 23rd April.

The Global Recession is ending, financial conditions are improving and a recovery is underway. However, credit supply remains relatively tight. In our view the recovery will be slow due to a de-leveraging consumer