The next big trigger for the global markets is expected to come from the European Central Bank's stimulus package, and Benoit Anne, managing director and head of EM strategy at Societe Generale expects it to come as early as September.
From that point of view, he is bullish on risky assets. He believes, central Europe might benefit the most from it. He says though good things are happening in Asia, he is still betting on central Europe. He sees downside risks to the euro.
Below is the verbatim transcript of Benoit Anne's interview with Reema Tendulkar and Sumaira Abidi on CNBC-TV18.
Sumaira: In the coming weeks, what is going to be the next big trigger, is ECB or Draghi going to be in the driver’s seat for the global markets now?
A: Yes, I would hope so. This is the key issue that everybody is rushing these days. I guess now we want action, enough of words. There are expectations that are building up on some ECB action and this is what is fuelling risk EBITDA towards risky assets at this point. This is the key event for the coming weeks indeed.
Reema: How soon could the ECB act by way of a stimulus and what could be the quantum this time?
A: We are looking at the meeting in early September. So it is imminent. We are going for substantial package here of asset buying and very strong policy signals. I am quite bullish from that standpoint on a number of risky assets including emerging markets.
Reema: So big one could come by September?
A: Yes.
Sumaira: If you are bullish on the prospects of the emerging markets, what would be your top pick there?
A: I would say because this is the ECB that is acting, I would say countries that are dependent on the ECB or closely related to the ECB would be better positioned. So that takes us a bit away from Asia I am afraid - but more Central Europe. I think Central Europe would be the favoured region in that kind of strong policy signals. The dynamics for Asia are quite different at this point, there are some good things going on in Asia, but near-term I want to be bullish on Central Europe.
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