This year was all about the exit from the Great Recession. Next year will be all about the exit from super-expansionary monetary policy - we expect the major central banks to start exiting around mid-2010. The prospect and process of withdrawal may have unintended consequences: we think government bond markets will be the first victim.
A tale of two worlds. We forecast 4% global GDP growth in 2010, but this masks two very different stories. One is a still fairly tepid recovery for the advanced economies. The other is a much more positive outlook for emerging markets, where we forecast output to grow by 6.5% in 2010. In short, we think that the themes of global rebalancing and EM growth outperformance have staying power and have even been bolstered by the crisis.
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