Investors to eye emerging markets opportunities: ETX Cap

Mark Priest, senior trader, ETX Capital spoke to CNBC-TV18 regarding the US non-farm payroll data expected in the afternoon today and the possibility of monetary stimulus pullback by the US Federal Reserve in September.

Also Read: Why some foreign investors are buying India

Below is the verbatim transcript of Mark Priest’s interview on CNBC-TV18 Q: Global markets have been quite buoyant but how will the global liquidity setup change once the Federal Reserve (Fed) policy comes out?
A: People are still very nervous of when the Fed tapering will start and that coupled with international events has slightly got the markets on edge. We are seeing positive moves while everything is nice and calm but we have non-farm payrolls out this afternoon and that will set the tone for the rest of the day. Until that, we will see some nervous trading up. Q: It is quite buoyant for the Indian market, we are up around 1.3 percent for the Nifty and have some appreciation on the currency as well. We have other emerging markets like Jakarta which is in green as well. This is despite the US treasury spiking to levels of around 3 percent intraday. What does that tell you about the emerging markets, is the worst possibly factored in already from the FOMC tapering?
A: Yes, you are partially right. The emerging market sector has suffered quite severely in the last few weeks. We have seen big sell-off across every region and once people digest the numbers we are seeing good growth in China, we have more figures from China on Sunday that are also expected to be positive and some of that will filter back down. People will calm their nerves on the performance of these emerging markets and will see these as a good buying opportunity. Q: What is your expectation on the non-farm payroll number because some newswires point out that it could be more than 180,000 jobs, if that takes place then it will tilt the odds in favour of the Fed tapering. What is your expectation on the number?
A: Around 180,000, has been bounced and we are now in a slightly strange scenario where a good number could be seen as a negative by the market and it could facilitate the tapering to be brought forward. It will slightly unnerve the market so it is difficult to predict what will happen because it is good news that the US economy is getting better, the unemployment is coming down but the only slight downside is the fact that we have the possibility of a tapering being brought forward from next year.