LTRO, Greece, G-20 seen positive for euro zone: RBC Cap

ALSO READ See what other FIIs are saying about the markets See what other experts are saying about markets See what Udayan Mukherjee is saying about the markets

Gustavo Bagattini of RBC Capital Markets spoke to CNBC-TV18 about what is happening at the global markets.

Below is the edited transcript of the interview. Also watch the accompanying video.

Q: What would you expect to see in terms of a medium-term reaction on equity markets with the news on Greece today, is most of it in the price or could there still be some sentimental upward movement?

A: I think a lot of it was in the price already as we went into yesterday. Even as we went into the end of last week, the new package for Greece was taking shape and for the first time in quite some time, we weren't disappointed with the outcome of last night's EU group meeting. A lot of details turned to be determinant and still lot of validation needs to take place, but this is definitely a positive step, especially given that when we first had an agreement on the second Greek bailout was exactly seven months ago. We have taken quite a stride over the last seven months. It is not to say that we have the 'all clear' now because there are still number of issues we still are going to have in the very short-term such as parliamentary approvals in countries like Germany to give their blessing on this package, and over the medium-term, a definitive direction on tax collections and the ongoing reviews of the programme and whether they actually meeting to the optimistic assumptions that underpinned their return to more sustainable condition.

Q: The next big trigger that the market is watching out for is the second round of LTRO by the ECB. Do you think it may have as much fire power as the first one? Do you think that there could be another big bout of liquidity driving global markets on the upside?

A: It is going to be part of it. There are three-four elements that are falling into place. So, we are seeing the next 10-14 days, which are going to be quite positive. The LTRO is one and we are expecting a similar figure, another 500 billion euro to be taken up which should continue to prevent any accidents from happening or any financial institution running from refinancing troubles.

On top of that we also have the Greek bailout presentation itself. We have a new fiscal compact for the eurozone, which should be seen as a stepping stone towards eventually having some kind of combination. We are expecting to hear more on resources for the IMF this weekend with the G-20 meet. We could see quite a few movements in terms of a fire power to contain the European crisis in next couple of weeks.