• Share markets and related trades such as commodity prices and commodity currencies have fallen over the last two weeks, partly triggered by worries about the impact of Chinese tightening and the re-emergence of sovereign debt problems in Europe.

• However, this is likely to be a correction in an ongoing cyclical recovery in shares, as the global recovery looks like it is continuing, shares are still cheap, the liquidity backdrop for shares is positive, and a cashed up corporate sector is likely to lead to increased capital being returned to shareholders.

UBS global chief economist Paul Donovan is confident the world economy will not suffer a double-dip recession. But he says the Irish debt crisis shows there are ongoing risks for global financial markets. London-based Mr Donovan briefed the investment bank's major corporate clients late last week, with the forecast that the world economy would grow at trend rate over the next year as it recovered from the global downturn.

However, the severity of the crisis meant trend growth would not be enough to reverse major problems such as unemployment in the worst-hit economies.

"My main message has been that there will be no double-dip recession. You have my word on that," Mr Donovan said. "But we do have a global scenario where the world economy will grow at trend for this year and next year. "Now, trend growth does not sound too bad. But the problem is that we have had two horrible years. If we grow only at trend, we are not eroding or reversing . . . what's happened in the recession."