Expect European market, euro to head lower: NAB

The euro remained under pressure and the Asian shares eased on Thursday. There was further setback to the market due to rise in Italy's funding costs that weighed on the already worried market gripped with the controversial Cyprus rescue deal.   

"There is a good chance that we (will) head lower both in terms of the European currency and indeed for European markets," says Nick Parsons of National Australia Bank in an interview to CNBC-TV18. 
Parsons feel that the currency will lower because of the policymakers taking wrong decisions on the back of investor sentiment. Markets have been spooked by what the new leader of the euro group is saying. Contradictory words, mixed messages and unclear position is emphasising the downside risk for investors from current levels, he says. Below is the verbatim transcript of Nick Parsons's interview on CNBC-TV18 Q: What do you make of the news flow that is coming out of Italy, coming out of Cyprus and overall what does this mean for Euro zone markets?
A: The emphasis in European markets is very much focused on downside risk from here to a different mood to the one that we saw in the first six weeks of the year. There is a good chance that we head lower both in terms of the European currency and indeed for European markets because policymakers, in whom the markets had placed so much trust and faith, appear to be betraying that trust by some idiotic judgements and pronouncements.
Markets have been spooked by what the new leader of the euro group is saying. Contradictory words, mix messages and unclear position is emphasising the downside risk for investors from current levels. Q: What about the euro, 1.27 levels for the euro, we have not seen these levels in months, and do you see further weakening?
A: On November 21, euro was on a 1.27 big figure. We will come lower. The November low was 1.2660 and below that then the low of last June looms in at 1.2070. If we just give a bit of a context there, the low was 1.27 till last year immediately before Draghi promised to do everything it takes.
The high in January was 1.3710 so we have just retraced. We have given back over 50 percent of the entire rally. That is a negative technical signal and certainly there is scope for further downside in the near-term because if investors believe that savings are going to be stolen, their access to money is going to be frozen, then we no longer have single European currency. That is somewhat fundamental to its entire existence and so there is scope for markets in the near-term. We perhaps get to Draghi’s next ECB (governing) Council meeting, the one man in whom markets still trust, then we are at the whim of politicians over the Easter weekend and you have to fear for the downside from here.