The US Fed’s rate cut cycle will reinforce the gush of liquidity to Indian markets, which, along with earnings growth, should continue to offset valuation concerns in the near term.
It is prudent for investors to bet on the resilient domestic earnings story
London, Aug 29 (Bloomberg) Gold today dropped for a seventh day, heading for the longest run of declines since May, and silver fell to a two-month low as comments from leading central bankers boosted speculation that US interest rates may rise as soon as next month, buoying the dollar.
The US market offers a curious picture, with the S&P 500 being perched near all-time highs even as bond yields are at an all-time low.
Micheal Every of Rabobank expects the US non-farm payroll data to come in at 217,000 in August versus 215,000 In July.
Economists expect to see about 180,000 jobs added in November, off from October`s 204,000 level, and the unemployment rate a 10th lower at 7.2 percent.
Markets are factoring in relatively weak non-farm payrolls number, at around 155000. But there may be a fall in unemployment rate – moving down to 7.5 percent compared with 7.6 percent
In an interview to CNBC-TV18, Cameron Brandt, Director - Research, EPFR Global said that the FII outflows from emerging markets had seen a moderate reduction. He added that India had seen an outflow of USD 12 million on the last day of the last week.
Dominic Bunning, associate director – FX strategy, HSBC says that even though expectations are that emerging markets are supposed to perform well, this has already been discounted by the market. The US is may show minor recovery. There will be more demand for dollars at least in the short-term, he says.
Strong non farm payroll data could further support dollar strengthening, says Agam Gupta of Standard Chartered Bank.
The rupee weakened on Monday on account of dollar demand from oil refiners, but further losses were averted on hopes of more monetary stimulus by the Federal Reserve following weak non-farm payroll (NFP) data in the U.S. on Friday.
Gustavo Bagattini of RBC Capital Markets explains to CNBC-TV18 that Hollande‘s stance after being elected as President is key to the euro and growth in the recession-affected EU