Goldman Sachs believes foreign fund inflows into emerging Asian markets will only get reflected when trade outlook volatility on the global front reduces. The upheaval triggered by trade tariffs has sparked a risk-aversion mood in investors across the globe. This is driving traders to safer havens like gold, if not the dollar index, as of now, said Timothy Moe, chief Asia-Pacific equity strategist, Goldman Sachs.
The dollar index is on a downward trajectory, according to the brokerage. The dollar index is 15% overvalued, according to several long-term, fair-value models Goldman Sachs refers to.
"Significantly, the US current administration has publicly said that they would like dollar to be weaker."Timothy Moe, Chief Asia Pacific Equity Strategist, Goldman Sachs
Goldman Sachs Chief Asia-Pacific Equity Strategist, Timothy Moe, was speaking to NDTV Profit Executive Editor Tamanna Inamdar.
Goldman Sachs Chief Asia-Pacific Equity Strategist, Timothy Moe, was speaking to NDTV Profit Executive Editor Tamanna Inamdar.
Historically, a decline in the US dollar causes money flow into Asian and emerging markets. The key point is that a moderation in the global environment is required, Moe said in an interview with NDTV Profit.
The recent news from London is encouraging. However, markets have not received any substantial details yet. The direction where the US and China are heading in terms of trade talks appears to be better than where they were in early April. However, a degree of uncertainty remained, he said.
The second day of trade talks between US and China concluded in London. Both sides have reached a consensus and a final framework is needed to get approval from presidents of both countries, as reported by Bloomberg.
US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer are leading the country's delegation, while China's Vice Premier Hi Lifeng is leading Chinese delegation.
View On India
Goldman Sachs maintained a marketweight rating on India. Recovery in agriculture, consumption, and earnings growth were positive, he said.
Goldman Sachs is looking at 12% earning-per-share growth for calendar year 2025 in India. Fundamentally, things have stabilised and look constructive, Moe said.
India's challenge is that valuation is high. The MSCI India Index's forward multiple was 23.23 times price-to-earning ratio, which is 1.4 times above the 10-year PE. Hence, investors may focus on certain pockets of Indian markets.
US Economic Growth To Fall To 1% In Q4
Goldman Sachs is estimating that economic growth in the US will fall to 1% in the fourth quarter year-on-year, from a strong run rate in the second quarter. GDP numbers of the first two quarters are volatile and it is hard to get a real grasp, Moe said.
The key debate for market watchers is the tension between hard data and soft data. Soft data, affected by expectations, got compressed very significantly, which is expected to recover once market participants get clarity on trade outlook, he said.
Goldman Sachs projects a two-third recovery in the soft data, while deceleration in the hard data will likely continue, he said.
The brokerage's US portfolio strategy team found out that the markets have already factored in some of the expected decline in hard data, and expect recovery in soft data. It's likely the reason why markets have recovered very swiftly from April lows in the US, and in many regions, Moe said.
RECOMMENDED FOR YOU
How US Tariffs On India Stack Up Against Asian Peers
Jul 30, 2025
'Buy' L&T, GAIL, 'Add' Asian Paints, KEC, 'Reduce' Heidelberg Cement, Says HDFC Securities Post Q1 Results
Jul 30, 2025
'Time To Be Stock-Specific': This Goldman Sachs Expert Prefers NBFCs, Private Banks Over PSBs — Here's Why
Jul 25, 2025
Why Samir Arora Isn't Gung-Ho About India-US Trade Deal
Jul 17, 2025
POPULAR