Although US economic data released in April was “slightly
weaker” than previous months, BMO Harris Private Banking nonetheless
anticipates the economy to grow at a “modest pace,” with notable strength in the
manufacturing sector.

In its April Market
Commentary report, BMO foresees a year of global economic growth and “moderate”
positive equity market returns that outperform weak - but positive - fixed
income returns.

“Real GDP for Q1 was slightly lower than market
expectations, at 2.2 per cent, but still relatively good for a recovery that is
unfolding in the shadow of a major debt overhang,” said Jack Ablin, chief
investment officer, Harris Private Bank. “We anticipate the US economy will
grow at a modest pace, with particular strength in manufacturing.”

Albin added that the US economy will be the “key
driver” of capital markets in the coming year, “despite occasional overseas
distractions.”

However, a combination of fiscal challenges and the
fact that 2012 is a US election year means that periods of “distracted”
recovery, as noted in April, are likely.

Specifically, the report predicts a “slow summer,” owing to ongoing troubles in the eurozone, as well as market reaction to the US
election process.