Long-term positive on India, Budget good for mkts: Nomura
Published on Tue, Mar 16, 2010 at 12:11 | Source : CNBC-TV18
Updated at Tue, Mar 16, 2010 at 15:59
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Long-term positive on India, Budget good for mkts: Nomura
Alastair Newton, Managing Director and Senior Political Analyst at Nomura International, feels the Euro zone problems are not over yet. “There are significant concerns among fund managers over Spain.” The US concerns, he said, were expected to build-up close to mid-term elections.
Q: The underpinning of every market thesis continues to be the currency it seems. How are you mapping the dollar?
A: I am not a currency strategist. So please take what I say in that context. When I look at the world's three major currencies, the dollar, euro and yen, and I look at the political situation in all of those economies. I don't see anything other than domestic political downward pressure on those currencies.
So the question is very much as we look forward through this year, where is the domestic pressure going to be greatest among those three economies. And, as we see the euro area getting beyond the current problems with Greece and possibly Spain as I suggested earlier and America gets closer to the mid-term elections, concern about the deficit is likely to rise.
We don't see much if any improvement in unemployment in the US, between now and the end of the year. We do see a potential for financial market regulatory reform in the US, to be a negative on market sentiment and overall I would expect to see some downward pressure on the dollar, in the second half of this year. But whether that is greater than the downward pressure on the euro or the yen, is still a very open story at the moment and for me, one of the most difficult challenges this year, is the challenge faced by my colleagues in our currency strategy team in trying to forecast end-of-year exchange rates, very critical to markets worldwide whether we are talking about foreign exchange, portfolio managers or bond portfolio managers or equity portfolio managers.
