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It is very safe to bet on precious metals now: Priya Misra
A weak dollar need to be positive from a macro view for emerging markets, nevertheless within EMs, there are proceeding to be big variances between different countries, according to the Managing Director and World-wide Head of Rates Approach at TD Securities.
It is not a pretty photograph that we are getting from the YOU markets. Asia is prepared today but what does the case look like going ahead for people?
We had a pretty good salaries report and so I have to say that there was a little bit of expectations about the US recovery, Nonetheless we have got a pretty complicated path ahead. We have been expecting the fiscal stimulus however, not really seeing signs of this Democrats and the Republicans arriving together on that the front.
We have a highly good election ahead and educational institutions are going back online. So, there is this malware fear at the back of our brain as well and also about how our economy continues to recover. Most eyes are on the Provided meeting. There has been a lot of value action in the dollar because equities notwithstanding the the latest volatility, but overall possibility assets are doing well.
Next week, we have the Sept. 2010 Fed meeting and everyone is looking at how much they are going to ease and whether they might help risk assets to keep on to do well in this face of the uncertainty about fiscal government and this election which is a pretty big uncertain event in front of us.
Are the markets well prepared for the election uncertainties? What can we learn from this for the emerging markets?
There is a global growth factor for which Covid is the larger driver right now. So we possess to see whether Indian can continue to slowly but surely recover. India is having difficulties on the Covid the front as part of the EM world. That will is one massive kind of uncertainty but I would the next step would be what is the fate of the buck and there is some weakness in the dollar, that typically is a good sign intended for emerging markets and the buck has been weak in part due to the expectation of the Provided easing.
Our view is that the Fed is probable to ease may be additional through language and how they are really communicating forward guidance in addition to doing more QE understanding that should be negative for the buck. We have a pretty bleak watch of the dollar over the following few months, probably over the in 2012 irrespective of the election outcome. That need to be positive from a macro view for EM but then in emerging markets, there are proceeding to be big variances between different EM locations.
I would state there are these few huge macro factors and the will is another big aspect. In our view, a Joe biden win or a Democrats carry is likely to stay positive for emerging markets due to the fact then you got more of a international growth multilateral perspective from US rather than a continuation from the trade war tariff emphasis that President Trump has experienced for the last four years.
What is your view on the precious metals and also the crude?
For industrial items like oil or any from the non-precious metals, it is much more about global progress and on that the front, there is some stress and anxiety about the recovery stalling although we have had better data in america. People are nervous about every one of the pitfalls ahead and if do not get any fiscal government, we are not very optimistic on the industrial metals. We still have got more of a cautious outlook on life but for precious metals, we live very positive largely owing to the view that the buck is on its means down and we think this Fed is likely to ease. Plus, there is a big uncertainty with the will coming up and that should continue to keep gold, silver and other precious metals as safe destination assets.
We are very positive on gold yet others as more of a safe destination where one can hide out given the amount the equities have bounced back. Precious metals is some sort of very safe bet to have.