New York, 18 March 2010

Barclays Capital today said in its latest flagship quarterly research publication, Global Outlook: Party Continues, But Watch the Punchbowl, that as the current global economic recovery broadens further, investors will continue to be rewarded for taking risk over the next few months. Concerns about deficits and “double dips” are unlikely to undermine the global recovery, which instead faces its chief threat from monetary tightening, particularly in China and in the US. Despite this threat, the firm recommends investors maintain significant exposure to equity and credit markets. “We have come a long way since March 2009, when our bullish call for markets raised eyebrows,” said Larry Kantor, Head of Research at Barclays Capital, referring to the March 2009 Global Outlook: Green Shoots Have Arrived. “That call has played out, and markets have benefitted from above-trend growth, below-trend inflation and exceptionally easy monetary policies. While valuations are no longer compelling, equities and credit should continue to benefit from this environment. With the exception of China, policy tightening is not yet appropriate for most economies, and investors should still be positioned aggressively.”

Major themes of Barclays Capital’s Global Outlook include:

·         Recommending significant exposure to equity and credit markets, balanced with a short position in US Treasuries and a long position in volatility

·         US labor market improvement will establish sustainability of US recovery and place Fed tightening in prospect

·         Monetary tightening in China should slow growth in Asia and have a moderating impact on commodity prices

·         Europe still lags, but production data points to revival in coming months

·         Dollar to continue to perform well; weakness in Sterling appears overdone

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