Hans Goetti, CIO Asia, Finaport has expressed his free and frank opinion on the eurozone crisis and his opinion on world crisis is as enumerated below:
I wish I could say we have decoupling. The thing is that Europe is most likely in recession already. It will have an effect on rest of the world as well. There is high correlation between European and the US economies. If Europe is in recession, Asia will feel it as well. As far as the Euro is concerned, it has broken above important support levels. The next support is around 1.20. I am not sure whether it’s going to go down there in a straight line, but there is clearly downward pressure on the currency. I think the reason for that is that the ECB has for all practical purposes started to embark on QE. They have been lending massive amounts of money to banks providing liquidity to more than 500 banks. That money has to be printed; it has to come from somewhere. If you look at Central bank balance sheet, it has actually started to rise rather rapidly. We think there is more to come by the end of February. So, there is going to be another liquidity injection into the European banking system. I think that is at the latest then we will realise that the ECB is actually on the QE mode.
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