"Not as bad as expected" economic data from the US – possibly indicating that the world's largest economy would not slip back into recession

A positive if lacklustre start to Q3 corporate earnings season, and most importantly signs that European policy makers may actually put their differences aside and attempt to save the euro zone concept have led to the largest rally of the year so far with equity markets rallying over 12 in as many days.

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Even sovereign debt yields have risen despite being underpinned by Bank of England's £75 billion extension to its bond purchase programme.

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However give the markets current fickle state and low tolerance for negative news we advise caution at this time.

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Should the EU (read France and Germany) simply kick the credit can further down the road rather than crush it once and for all, markets may react negatively and potentially violently. Let us not forget that many believed us to be staring into the abyss only two weeks ago.