December capped off a good year for markets, with emerging market equities in particular playing catch up as signs of an upward turn in near term growth prospects showed through. China activity indicators finally showed a pick-up in activity. In the US the 'fiscal cliff' negotiations were a source of uncertainty, but a last minute agreement saw an effective pushing out of the cliff. Europe had a relatively quiet month in December with some indicators turning up, albeit from deep lows, but the lull in crisis activity gave cause for further improvement in European equities. Japan continued to be a standout with the Nikkei rising and the yen falling following the election of a new, more interventionist government.
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