“Risky” assets have made a bright start to 2012. Investors have welcomed a recent improvement in the US economic data, signs of greater fiscal coordination in the euro-zone as well as more support from the ECB. Confidence has also grown that China can avoid a hard landing. But our central scenario envisages a break-up of EMU this year initially involving Greece’s departure, an outcome that we think will pour cold water on investors’ optimism.