Q: Do you see the Dow climbing to higher levels from here or do you think it will take a breather and give back substantial part of the recent rally?

A: I do not think it is going to give up a substantial part of its rally. I think what we are going to see and what we have written continuously in our surveys is that there is going to be a long convalescence. We have a technical damage done to a lot of the western markets and uptrends that have been in place for the last four years were broken. So it is going to take time for the Dow Jones or for any of those big European markets to really move back upwards and test their all time highs. However, I do believe that they are going to do it; it is just going to take some time before they get there.

Q: What about India - what do you see in the near-term after the pullback that we have seen?

A: India has been a bit slow to get off the block, but it has rallied quite significantly from the retest of the January low in March. It has not broken above its February highs. So it is lagging some of these other markets. But India is a remarkable growth story and this is our favourite market for long-term.

There are so many fantastic bullish points to keep in mind when looking at the very long-term in India that I have no doubt that it is going to move back upwards and make new high ground, probably later this year. But it is probably going to range slightly higher and quite slowly move its way upwards over the coming month.

Q: As we speak, another big record for crude, USD 121/bbl now in trade in Europe. Till last week people were talking about reversing that short dollar long commodity call. But now it seems many of these commodities are pulling back, what do you see on both charts for the dollar and for crude?

A: Crude is a remarkably consistent chart at the moment. When we saw crude breaking upwards above USD 40/bbl a number of years ago, it was a very inconsistent chart that really told us that there was not really very big difference between supply and demand. It has become much more consistent which is a good indication that there is a big difference between supply and demand. Oil would now have to fall well below USD 110/bbl, to offset scope for that to really push upwards and make further new highs and that does have implications for the inflationary outlook as well.

Looking at the dollar, the dollar has had a reasonably good rally over the last few weeks and I think it does have potential to rally a little bit further in here. The reason for that although I believe that the dollar is a fundamentally weak currency and it will potentially go and make new lows later on. I think that there is short-term scope for it to rally further. The reason for that is so many people who were looking for safe havens for their money during the worst of the credit crisis, they have put their money into government bonds and they have put it into commodities. That money is now starting to flow back towards equity markets and equity markets in the US are doing quite well and we are seeing money flowing back into those markets not just from domestic US investors but international investors as well and that will support dollar in the shorter-term. I think that the dollar has potential to move higher in the short-term but fundamentally over the medium-term to longer-term, it is a weak currency.