Investor uncertainty remains high going into the 3Q as key emerging markets, which had been the primary source of global growth in the first half of the year, are feeling the effects of higher interest rates and other policy measures, according to an outlook presented by FOREX.com, the retail division of GAIN Capital, a global provider of online trading services.

In its 3Q 2011 Markets Outlook report, the FOREX.com research team believes emerging economy growth, especially out ofAsia, may be unable to pick up the slack seen from major developed economies.

"Unfortunately, high unemployment in the major developed economies remains the primary obstacle towards recovery," saidBrian Dolan, chief currency strategist, FOREX.com. "We think job creation numbers will be the critical data points in the months ahead which will drive our outlook on global demand."

In addition, major economies are likely to see a continuation of deleveraging (saving more and spending less) at both the government and household levels, which could generate further headwinds to consumption growth.

The FOREX.com research team also sees major risks from Eurozone debt markets as credit contagion appears to be spreading into core economies likeItalyandSpain. In the U.S., the major risk is a failure of negotiations to increase the debt limit and a temporary default or government shutdown.

Between weaker than expected growth in major economies and on-going debt crises in the U.S. andEurope, FOREX.com expects risk sentiment to remain fragile, exposing stocks and commodities to broad-based weakness.

Other expectations from the FOREX.com 3Q 2011 Markets Outlook include:

• The U.S. dollar is most likely to stay on the soft-side against other major currencies, but there are also expectations of periodic bouts of dollar strength on safe haven buying.
• The euro is not out of the woods yet asEuropecontinues to live dangerously in the second phase of the sovereign debt crisis.
• The U.K. economy may continue to disappoint in the 3Q with signs pointing to further weakness as elevated commodity prices hit consumer confidence.
• Japancontinues its long and winding road to recovery after the devastating earthquake took its toll on 1Q GDP, but recent rebounds in industrial production suggest a corner has been turned.
• Reconstruction efforts inAustraliaandNew Zealandmay support an earlier than expected recovery for the Oceanic nations, but a hard landing inChinawould short-circuit the expected rebound inAustraliaandNew Zealand.
• The recent outperformance of gold relative to silver suggests a potentially significant turning point for risk appetite as the prospects for global growth are not quite as rosy as earlier thought. This suggests the potential for more significant downside in global equities and other risk assets.
• In the oil markets, lingering effects from recent output increases alongside a still firm underlying structure may be the catalysts for a modest return of crude oil strength in the 3Q.