Asian Markets: Sense of impending volatility to continue – Nomura

The research team at Nomura explains that the sense of impending volatility that has pervaded recent sessions in Asian markets is likely to continue in the days ahead.

Key Quotes

“In Indonesia, Jakarta holds the second round election for governor (19 April). While likely a local event, a loss for incumbent governor Ahok may prove negative for the market sentiment. Even so, Indonesia continued to see strong inflows into the equity market this week. Perhaps of broader importance, the first round of French elections comes up on 23 April and the race remains close. Elsewhere, the US government’s continuing resolution expires on 28 April (leading to a shutdown if not resolved).”

“Even outside the political uncertainties, the near-term market outlook remains clouded. On the one hand, the dollar has weakened again recently (especially after Trump’s comments Wednesday that the dollar was too strong and that he preferred low rates). On the other, and more importantly from our point of view, economic surprise indices have started to roll over. Despite strong China exports reported this week, other data (notably inflation) have disappointed.”