Last week, the focus was on emerging markets, including elections, central bank meetings and specialist asset manager insights.
Presidential and legislative elections in Indonesia ended in a stalemate. It is likely that incumbent president Joko Widodo won, but his opponent, Prabowo Subianto, is refusing to concede before the vote count is completed. A full count could take another month, and the delay may create instability in the country.
In monetary policy news, the central banks of Russia and Turkey held their meetings. Both banks cited a range of local and global concerns to justify keeping their rates constant. The data shows that the steep devaluation of the Turkish Lira weighted heavily on Turkish debt servicing costs. The impact of the 2014 Ukrainian crisis is still visible in the Russian economy. The Bank of Canada and Sweden’s Riksbanken displayed a similar holding pattern of dovish accommodation.
The week ended as it started, with uncertain elections. Spain‘s Sunday general election is likely to result in extended coalition talks, as no party will gain an outright majority, despite a plurality of votes going to the socialist party, PSOE.
Ekonamik also introduced the new “Asset Managers’ Insights” column, where we focus on a specific market segment every week and review recent developments, trends and the views from asset managers’ desks. This week’s review of Emerging Markets covered 12 asset managers and revealed a range of interesting facts, including equity-bond divergences, Chinese growth hopes, political concerns and Argentinian confusions.
Finally, in a more analytical article, we also highlighted an interesting research note from Winton Capital discussing whether market volatility has increased over the last 60 years. The note allowed us to discuss different views and methodologies and to review the evidence on emerging markets