Overview

March 2010 (covering the month of February 2010)

Equity markets saw a divergence in performance between Eurozone economies and those of the US and the UK. In the US and UK
equity market returns compared favourably with their respective government bond and corporate bond indices. Conversely, in
Europe, better quality government bonds outperformed corporate bond indices and the majority of equity markets, as fears
surrounding the state of peripheral Eurozone finances weighed on sentiment. Greece remained in the news as Greek bonds sold
off markedly following an announcement from S&P that it may downgrade the nation's debt "within months", due to the economic
and political challenges its government faces, undermining its ability to cut the budget deficit.

Commodities saw strong performance, the CRB futures index rose by nearly 3.5%, led by a 9% rise in the price of oil while in
currency markets it was another good month for the US Dollar against the Euro and Sterling.

In his address to the US Congress, Federal Reserve Chairman Bernanke acknowledged the inevitability of some future tightening
but reaffirmed the commitment to hold rates at exceptionally low levels for an extended period. Labour market conditions,
rather than improving, were seen to be experiencing a less aggressive deterioration, while inflationary pressures were seen as
remaining subdued for 'some time'.

US

• US consumer confidence dips as potential customers adopt a more pessimistic outlook for jobs and earnings
• Manufacturing and service industry activity expands further
• Successful Q4 2009 earnings season nears its end, with three-quarters of S&P 500 companies having reported so far, beating analysts' earnings-per-share estimates

Europe

• Greek woes continue to weigh on markets
• Euro falls for third consecutive month against US Dollar
• Economic sentiment falls, including first fall in German Ifo for almost a year

UK

• UK equities end the month higher
• Inflation rises following January’s rise in VAT
• Nationwide house price index sees its first fall for 10 months

Asia Pacific

• Annualised fourth quarter GDP data is positive across Asia
• Japanese GDP up 4.6% annualised, according to the preliminary estimate
• Chinese central bank increased the reserve requirement ratio for the second time in two months

Emerging Markets

• Gains in Latin American equities supported by an advance in commodity prices
• Asian stocks underpinned by better macro data from China although Taiwan and Korea underperform as technology companies out of favour on 'double-dip' recession concerns
• Losses in EMEA region dragged lower by political instability in Turkey

Fixed Interest

• Attention in fixed interest markets remains on government bonds
• US Federal Reserve Chairman reaffirms commitment to exceptionally low interest rates for an extended period
• Credit markets weaken slightly, but remain positive year-to-date

Where Invesco Perpetual has expressed views and opinions, these may change.