Guest blogger Gerard Fitzpatrick is portfolio manager at Russell Investments, where he runs a $5 billion global bond fund.

The views expressed here are entirely the author's own and do not constitute Reuters point of view.

The global economic outlook is positive overall, currently powered by China and America's twin engines of growth. Questions have been asked about the level to which the Japanese disaster may slow down the world's economic recovery, but in reality, it's expected to have only a small negative effect on global growth this year.

Europe remains constrained by the Euro sovereign crisis, and we expect to see only low levels of European growth. Europe is moving in the right direction, but there are still lingering challenges. Despite Greece and Ireland remaining at risk of default, the economic outlook is moderately positive.

The Portuguese parliament has taken a striking gamble that will be acutely monitored by other European governments and bond investors. If they continue their refusal to accept harsher austerity measures, the outcome for Portugal could simply be binary, where either deeper support from the bailout providers will be made to balance the books or their refusal to accept such harsher austerity could push the already politically stretched bailout providers to breaking point. At an extreme, this could push Portugal into an abyss of confidence with bond investors and rating agencies.