Expect first Fed rate hike in September: Credit Suisse

With May US non-farm payrolls pushing the 3-month moving average for jobs above 200,000, Sakthi Siva of Credit Suisse believes Fed tightening is back on the agenda with Credit Suisse Economics team looking at September for the first rate hike.

According to her, the key question for markets though is whether this is already priced in. “The answer appears to be 'No', as MXASJ (MSCI Asia ex-Japan) has corrected 7 percent from its highs versus corrections of 14 percent during the Fed taper in 2013, 21 percent during the 2004 tightening & 25 percent during the 1994 episode,” Siva explained.

Sunil Garg, JPMorgan said Nifty's bearish hue now faces a crucial 8000 test. The index has traced out a 'head & shoulders' top with an 8000 'neckline' - a break below this has a measuring implication of around 1,100 points downside, he added.

For now, 8000 is a critical level for the index although base case is bearish with meaningful downside, Garg said.