The flow of global data has been well above consensus in recent months. The build up of better economic prospects has step by step forced markets to consider a world significantly different to that expected for much of 2011.

Returns on the NZ Corporate A-Grade Index outstripped other major credit indices in 2011. The running yield on the index was supplemented by the capital gain from the fall in prevailing market interest rates.

New Zealand shares were among the better performers during November, a month dominated by the European debt crisis and, closer to home, the General Election.

The European sovereign debt crisis remained the main driver of global fixed income markets during the course of October, continuing the theme that dominated markets over September.

Markets are swinging from focusing on significant downgrades to European growth expectations and the prospect of financial contagion from European debt stress to hope that a road map for Europe will be 'published' in coming months.

Harbour Asset Management fixed income manager Christian Hawkesby looks at recent economic developments including the US downgrade and local market news and explains what they mean for investors.

Harbour Asset Management's New Zealand Equities Monthly commentary looks at Australia's under performing economy, updates on Chinese trends and examines the converging factors that have helped boost the New Zealand economy.

Harbour Special Commentary: In this piece Harbour Asset Management looks at what the downgrade of the US credit rating means to markets and investors.