CLSA's Chris Wood says that a systemic event in the financial markets is likely to be triggered by Italy and Eurozone.
CLSA’s Chris Wood says that a systemic event in the financial markets is likely to be triggered by Italy and Eurozone. It comes against the popular belief that an ongoing trade war, a much anticipated Chinese currency collapse or overvalued Wall Stress FANG stocks are the major triggers for stock market crash to happen. Italian government is likely to trigger a renewed existential crisis in the Eurozone, he also said.
“Current Italian government is likely to trigger a renewed existential crisis in the Eurozone once the Europeans return from the beach and the Italian Government comes up with a budget for 2019 which is likely to put it in direct conflict with the Maastricht Treaty,” said Chris Wood. However, he also said that all these factors are still interconnected, CNBC TV18 reported.
Meanwhile, earlier in July, Chris Wood had said that as the tariff war rises, automobile industry will be the most impacted. Donald Trump also poses one obvious threat, he also said.
As trade war escalates, move would almost certainly trigger retaliation in the auto industry which will lead to a renewed focus on the peaking out of globalisation and retreat from Pax Americana, Chris Wood had said in CLSA’s Greed and Fear report.
The US monetary tightening expectations have increased, he had then said. While the emerging markets continue to feel the pressure of a rising US Dollar, Wood noted recently that conditions are becoming difficult for emerging market (EM) investors.