QOTD: Clear Horizon

Our expectation is that, as of 1 July, the investment horizon will be clearer than it has been for many months even though the machinations over a deal between Greece and its EU partners are proving exceptionally hard to conclude.

Our view is based on the simple judgment that, at this point, the costs of failure for all parties have become too high for there not to be an agreement to extend Greece's programme.

Markets have gone into something akin to hibernation as a form of selfprotection against the turmoil, making it easy to forget the underlying macro dynamics. Against a backdrop of strength in small caps, improving housing momentum and our economists' expectation of an above-consensus 240K rise in payrolls, we remain constructive on risk.