European crisis is more alarming than US: StanChart

News of the European Central Bank (ECB) buying Italian and Spanish bonds to avoid a default has taken the markets by storm. Investors fled by shorting that led to the European market (DAX) falling almost 6% immediately. Adding to the existing pains of the eurozone crisis was the disappointing export data from Germany. Gerard Lyons, Global Head of Strategy & Economics at Standard Chartered joins CNBC-TV18 to explore the situation and the impact of it on other markets.

Below is the edited transcript of the telephonic interview. Also watch the accompanying video. Q: What is accounting for this level of choppiness and volatility in the markets? What really are the markets looking out for today, is it the Fed?
A: I think there is a whole combination of factors coming together. In the last week, three factors already came together- indecisive policy making in America and in Europe, then we have had very excited markets which have been very prone to poor news and then the additional factor that come to play last week is immediate catch-up with reality- a realisation that growth prospects in America and most part of Europe are pretty poor, pretty sluggish. So all of those factors have combined together, obviously the downgraded the US situation on Friday didn