After a near uninterrupted rally since July 26 that saw major global equity indexes gain over 10 percent and the US dollar fall 5 percent, the markets have taken a U-turn since Friday, August 19.

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In an interview with CNBC-TV18, Jahangir Aziz of JP Morgan and Steve Englander of Standard Chartered discussed at length where the markets are headed in the second half of the year.

The market expects growth in the US and China as the year progresses, according to Aziz.

“In the second half of the year, we do expect the US economy to go from minus 1.2, not very much, to about 1.5. It is a move upward and the Chinese economy regardless of all the fear we have about the Chinese economy, the Chinese economy is going to go from zero in the first half of this year to about 7-7.5 percent annualised rate to get about 3 percent year on year growth,” he reasoned.

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Emerging markets ex-China are also slowing down and slowing down appreciably because of the impact of the almost a yearlong increase in rate hikes.

“In this environment, it is likely to be the case that you are going to see dollar strength, perhaps not so much against Chinese Yuan Renminbi (CNY), but clearly against emerging markets ex-China as well as again Europe,” said Aziz.

For the entire discussion, watch the accompanying video