If you believe US bond markets they would be looking to rising 10 and 20 year yields even as PIMCO gets invested wholly in Japan for the added boost from Yen depreciation to the yields. That means the earliest such wholesale buyers will return to US markets is 6 months away and by that time yields ill be 2.5-3%+ in the 10 year range where it is already back to 1.7% levels after a bump in 2012. However global equities are keeping the faith in Economic recovery till the Fed which published minutes of its March meeting yesterday gets down to reducing the monthly QE flows of $85 Bln or limiting them to treasuries / mortgages picking and choosing one over the other meaning a global scare for equities right before Holiday season.
Yet that is at loggerheads within US investors preference for bonds and equities let alone based on expectations of a consumption and production recovery in the second half of the year after being belied once. The global trade recovery and the data from China does suggest a new bulwark of Economic improvement and establishment of a new post crisis order which does currently seem set to exclude Europe which no longer desires to be or expects to be that significant a market for international traders despite global MNC businesses headquartered there. Like its banks considering moving out as they get invested in Europe, there might be international speculation of businesses keeping market segment presence but otherwise looking at moving business HQ closer to bigger markets in the US And EM a focus that earlier ended with late sub prime investments and failed M&A of US entities but till last year continued with Europe as the center of business decision making
Global trade based speculation apart, invest,ment flows from Europe have always been thick and a significant proportion remains headed to Asia which is still managing to stay out for the festivities despite some regulation headwinds that have become part and parcel of regional business here. The diversity in business models from Malaysia and China to Singapore and korea and ofcourse India and South Asia retain an appeal for money from the Middle east and OECD even as MENA continues to expand the bubble without the erstwhile push from India and even China
As you can see, India’s predilections with domestic markets and trade are unlikely to be the issue in domestic markets as long as the Economic growth is capped at a round 5% and Infy results remain only a risk in that the markets have chosen not to push out Infosys stock to its bedrock levels around 2500 and management is unlikely to have a very rosy view of 2014 making a sharp cut likely left in reserve for results day morning and TCS and WIPRO will follow into a whirlpool of aspersions/suspicion on their forecasts.
Global/US Banks start reporting tomorrow but Q1 i unlikely to have much to show in non US business growth except for trading volumes in India for Goldman Sachs that reports Tuesday evening. Adrian Mowat mentions on TV18 that the Asia come again rally and the continuing US equities uptick this week is led by defensives.
Emerging Mrket inflows are intact despite the accident of China which is a longer lasting depression and a gradual comeback with Emerging Asia landing nearly $10 B in net inflows and the net outflows out of the smaller India pie seems still miniscule to look at a sustained bear offensive in India
The Telecom saga continues to turn ugly every quarter in the legal battles and even otherwise as is germaine to that utility’s fate in many other advanced economies as well but Bharti and esp Vodafone or even Idea and Uninor seem likely to survive for more gains in the business in India though it may never have a stable annuity component from the looks of it.