Global equities to resume rally in Q4: JP Morgan AMC

There was renewed hope on QE3 after the minutes of the Fed meeting. According to Economos, any move out of either Jackson Hole or FOMC meeting will be largely symbolic. "They may make a symbolic move and continue to twist with this extension of maturities, trying to push down some of the longer term yields. They will continue to remind the market that they are watching the level of interest rates and the US economy, particularly the housing market. So it will be significant but it is more assuaging at this point, more so than actually QE3 or any significant plan."

Here is the edited transcript of the interview on CNBC-TV18.

Q: Are you seeing any signs of fatigue or do you think the kind of risk-on phase we have had for the last six weeks will continue for a few more?

A: I see the risk rally continuing, however, there will be a pullback. Technically, the trade looks like it is over extended; the rally has done quite well. We have an eventful calendar in September - political, economic and otherwise. As a result, it would give the market room to pullback and give it some breathing space. But I expect the equity markets to continue to rally into the fourth quarter.

Q: What do you expect from Germany in the next few weeks? Do you think the Germans have come around to accepting the Bond Purchase Plan mooted by Draghi?

A: I think Ms. Merkel had her summer vacation, she had time to think about the issues at hand and finally understood them. She has realised Mr. Draghi at ECB was right and has decided to fall in line with the plan to save the euro and the eurozone. So yes, I do think there will be bond buying. Of course, we have got some constitutional court issues in mid September. But ultimately, Germany and the rest of the core of eurozone are committed to keeping the eurozone together.