According to it’s recently released market outlook commentary, BMO Harris Private Banking, expects stable, though small, growth over the next 12 months for the global economy. BMO predicts moderate growth on the whole for the global economy and sees some positive trends for the U.S, China and the Eurozone.

South of the border, gross domestic product growth is expected to be above 2% and BMO does not anticipate a recession next year. Part of that positive trend is due to the lower unemployment rate of 7.8% in September and an increase in the year-over-year pricing of housing. As well, despite low consumer confidence, Americans opened up their wallets often during the third quarter.

“On a larger scale, positive growth in one of the world’s most dominant economies means good news for the international economy,” says Richard Mason, head of investment management at BMO Harris Private Banking. “This particularly bodes well for Canada as the United States remains the single biggest influence on our economy.”

Despite a slowdown in the second quarter, BMO expects a soft-landing in China and a continued demand for Canadian resources. The soft-landing is due to a stimulus program implemented in the third quarter, which BMO believes will continue even after the expected political regime change in November. The outlook also predicts China’s economic growth to beat the government forecast of 7.5%.

Meanwhile, while the Eurozone remains a concern it appears to be less risky, according to BMO. This boost in confidence is in part due to the European Central Bank’s creation of the outright monetary transactions (OMT) program, a sovereign-debt purchasing program, in early September. As well, in the third quarter the yield on Italian and Spanish 10-year bonds dropped significantly indicating more confidence in the region. BMO expects growth to be flat in the Eurozone in the coming year.

In terms of the market, BMO see a continued climb in the price of equities and predicts that the asset class will outdo returns on bonds and cash. This prediction is based on the expected moderate growth of the global economy and a slight increase in North American corporate earnings.