Overview

Fear still rules many investors' hearts despite a good year for most investment assets. But 2013 has the potential to bring the winds of change, particularly in the US where we could see a growth "surprise". The surprise is not likely to be significant above-trend growth of around 2%, but it could exceed expectations and this would provide a boost to markets.

Summary

- Potential for a growth surprise in the US in 2013.

- Fiscal cliff in the US should be satisfactorily resolved and political uncertainty reduced.

- Europe remains a concern, but will be less of a driver of markets in 2013.

- UK to remain weak with the government under pressure to generate growth.

- Emerging markets growth will stabilise as policy actions take effect.