The MUFG Global Markets Podcast

The dollar advanced toward the end of the week before weakening into the London close. This was a good reflection of a choppy week of trading and Derek Halpenny, Head of Research Global Markets EMEA, talks to Simon Mayes, Head of UK, Ireland and Swiss Corporate Sales, about whether the large USD/JPY jump after Governor Ueda’s first BoJ policy meeting can be sustained.
Derek also looks ahead at the dollar’s prospects, with particular focus on the FOMC and ECB meetings taking place next week.
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The unified local elections are nearing an end, with strong showings by ruling party candidates. With no discernable upward stress on JPY rates, the Tokyo market clearly expects Bank of Japan Governor Kazuo Ueda to take his time adjusting monetary policy.
Yen cross-currency basis and Dollar / Yen have been relatively stable. In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido discusses the Lower House elections and shares his outlook for the Bank of Japan meeting this week. He also shares his views on spot Dollar / Yen, Yen rates, and Yen basis.
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Lee Hardman, Senior Currency Analyst, and Andrea Hayward, Vice President of the Japanese Client Sales Group for EMEA in London, discuss implications for the JPY from the Bank of Japan’s upcoming policy meeting and domestic political events.
They also discuss why the USD's recent rebound is unlikely to be sustained against other major currencies.
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In today’s episode and ahead of Earth Day this weekend, Dr. Tobi Petrocelli, MUFG Head of Sustainability & Transition Finance Strategy, and Beth Gilroy, Deputy Head of Sustainability & ESRM, discuss how MUFG is helping to resolve environmental and social issues focusing on combating climate change and supporting transition financing. We also review two key publications – our recently released MUFG Progress Report, which illustrates how we as a global institution are moving towards carbon neutrality and our MUFG Transition Whitepaper, which was published last October, in which we share our sustainability views globally and summarize the decarbonization efforts of Japanese companies as well as the energy policy of Japan.  
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George Goncalves, MUFG Head of U.S. Macro Strategy, is encouraged that stability has returned to the broader financial marketplace and the banks in particular, but he believes that it’s too soon to say the coast is clear. In his view, without a new negative catalyst, it’s understandable to see markets and policymakers return to their concerns over where we are in the inflation versus growth debate. And it’s true that vols in the broader asset classes have receded from the extreme levels seen in March. The concern is that after having witnessed some of the biggest moves in history, they can always come back and be disruptive once more. We think the markets have through the process of having less conviction on the macro outlook become a bit complacent as they wait for the next catalyst. However, we might need to wait until the conclusion of the upcoming Fed & ECB meetings in May before we get some clarity on where we truly are in the economic and liquidity cycle. Meanwhile, the debt ceiling concerns are growing and wait in the wings once the central bank meetings conclude. We remain cautious heading into summer.
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The Yen has weakened at the start of Japan’s new fiscal year while Yen rates and Yen cross currency basis have lacked momentum. The assassination attempt on Prime Minister Fumio Kishida over the weekend was shocking but did not elicit a major reaction in Japanese financial markets.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido reviews recent price action and cross border security flows in March, as well as changes in market structure of the Tokyo market. He also shares his views on spot USDJPY, Yen rates, and Yen basis.
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The week is closing out with the US dollar rebounding from a low point not seen since April 2022. Derek Halpenny, Head of Research, Global Markets EMEA & International Securities, discusses with Michael Owen, Head of Global Client Desk EMEA, about what drove the dollar to the lows this week and what lies ahead for the dollar.
Derek also discusses the outlook for the pound ahead of a busy week of economic data that will shape expectations for the BoE MPC meeting in May. 
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In today’s episode, MUFG Head of Prepayment Modeling and Strategy, Glenn Schultz, provides our estimate for turnover across the 2023 spring/summer home selling season and the implication of our turnover outlook on relative value across the coupon stack. He also discusses the near, intermediate term outlook for the agency mortgage basis against the backdrop of the SVB and Signature Bank failures, along with FDIC liquidation of the securities portfolio.
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JGBs have sold-off while changes to USDJPY and JPY basis have been relatively limited. The Bank of Japan’s March Tankan survey showed business sentiment worsened only slightly, as the jitters over the US and European banking sectors have not yet spread to Tokyo. However, the Nikkei Average is up only slightly as foreign investors unload Japan shares simply because they are a risk asset. Cross boarder bond flows have been massive in the Tokyo market.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido review JPY assets and securities flows in March and also looks ahead to triggers for April. He also shares his views on spot USDJPY, Yen rates, and Yen basis.
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We end the week for the first time since early March without any elevated investor concerns over the health of banks. The calming of investor concerns has seen US yields rebound but the FX response has been mixed.
Derek Halpenny, Head of Research, Global Markets EMEA and International Securities, discusses the FX impact of easing banking sector concerns with Simon Mayes, Head of UK, Ireland and Swiss Corporate Sales. Derek also looks ahead to next week and the potential rates and FX implications of the US jobs report at the end of the week.
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Dollar / Yen is well supported and judging from the speed of the reversal of yen rate declines and yen basis widening, the spread of risk from US and European financial unease to the Tokyo market has been limited. The market may have avoided major turmoil at the end of the fiscal year, but cross-asset flows and markets still need to be monitored for signs of stress.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido evaluates the current state of the market after the outbreak of financial unease in Europe and the United States, and discusses US TIC and JSDA securities investment flow data. He also shares his views on spot USDJPY, Yen rates, and Yen basis.
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Lee Hardman, Senior Currency Analyst, and Michael Owen, Head of Global Client Desk EMEA, discuss the loss of confidence in the banking system and how it is impacting central bank policy. Will the USD continue to weaken in response to banking fears?
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Japan’s markets have reacted to the banking issues in the U.S. and Europe in classic financial crisis/risk aversion fashion, with JPY rallying, JPY rates falling, and JPY basis widening. Japanese investors are passively watching the credit jitters in the U.S. and European banking sector, but they are being impacted considerably, given their sizeable stock overseas assets suggesting they will be monitoring global financial markets closely.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido shares his views regarding the credit concerns in the U.S. and European financial sector and his outlook for JPY cross assets and discusses the collaboration among six central banks for boost USD liquidity funding. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
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George Goncalves, MUFG Head of U.S. Macro Strategy, returns to discuss the new risks facing financial markets and how the Fed will handle the current inflation backdrop, while dealing with renewed bank issues. George reviews two of his recent reports, one focused on the financial system’s plumbing and liquidity dynamics and the other on his March FOMC preview. Listeners will recall that our house view has been that the Fed can raise rates as high as they like, but the criteria to stop matters more than where they settle at, while at the same time the more they hike, the likelihood that they break something in the markets or the economy or both where high.
We argue that the criteria to stop hiking is surfacing and that the hiking cycle may be close to being over. The tightening of financial conditions and credit standards post the recent bank failures, along with the long and variable lags of the prior hikes in the system (which are clearly leaving a dent on the financial markets) will likely result in the upcoming recession being ushered in sooner. This makes the upcoming FOMC meeting decision a much closer call as a result.
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Risk sentiment has continued to deteriorate. Derek Halpenny, Head of Research, Global Markets EMEA and International Securities, discusses with Shan Husain, Vice President FI FX Sales, the concerning deterioration in investor sentiment into the end of the week despite numerous steps taken by the authorities in the US and Europe to restore confidence in the banking sector.
Derek also looks ahead to the implications of this uncertainty for the FOMC and BoE policy meetings next week and speaks about currencies that are set to perform best if current market conditions persist or deteriorate further.
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The Bank of Japan’s decision to stay the course at its March meeting was the calm before the Silicon Valley Bank collapse’s storm. Over the near term, market participants will remain on guard and USDJPY and JPY rates will inevitably fall. JPY basis could be mixed, depending on duration.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido reviews the BoJ’s March Monetary Policy meeting, discusses his expectations regarding the government-BoJ joint statement as well as his outlook for BoJ monetary policy. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
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Lee Hardman, Senior Currency Analyst, and Seiko Kataoka-Fisher, Vice President of Japanese Customer Sales for EMEA in London, discuss the fallout for the FX market from Fed Chair Powell’s semi-annual testimony and fresh concerns over the health of US regional banks.
They also discuss whether the Fed will step up the pace of hikes later this month?
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USDJPY has stopped rising while 10-year JGB yields remain stuck at 0.50%. The Nikkei Average is up and risk sentiment is positive. Japanese investors have been rebuilding their foreign bond positions ahead of the end of fiscal year 2022. Japanese investors’ foreign bond flows are stronger than JPY bond flows among foreigners.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido previews the March Bank of Japan Monetary Policy Board meeting and shares his outlook for JPY rates in March. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
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After a choppy and largely directionless week in the FX markets, Derek Halpenny, Head of Research Global Markets EMEA and International Securities talks to Jack Greenslade, Associate in the Global Markets Sales Division, about the conflicting macro forces that have kept the US dollar in check. They also look ahead to next week and beyond to assess the potential direction of the dollar, as well as the possible impact of the National People's Congress on Sunday, Jay Powell's semi-annual testimony on Tuesday and Governor Kuroda's last monetary policy meeting next Friday.
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The spotlight has been on the vetting process for the Bank of Japan leadership nominees in the Diet since last Friday. The process has been smooth so far, and USDJPY has not been volatile but outgoing BoJ Governor Haruhiko Kuroda could still spring a surprise at his last Monetary Policy Board meeting in March.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido shares his impressions of the BoJ leadership nominee hearings and considers the implications for JPY basis and JPY rates. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
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Stronger activity data and firm inflation data is triggering a hawkish repricing in global rate markets. Lee Hardman, Senior Currency Analyst, and Simon Mayes, Head of UK, Ireland and Swiss Corporate Sales, discuss whether the USD will continue to rebound alongside rising US yields. Did incoming BoJ Governor Ueda open the door for further USD/JPY upside?
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This week was the third consecutive week of strength for the US dollar (DXY basis) and Derek Halpenny, Head of Research Global Markets EMEA and International Securities, talks to Shan Husain, Vice President FI FX Sales, about the drivers of the FX move including the US CPI and other data this week and the continued hawkish rhetoric from Fed officials.
Derek also looks ahead and assesses the FX outlook, including the pound after the UK CPI data.
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George Goncalves, MUFG Head of U.S. Macro Strategy, walks us through the worse than expected January CPI inflation report and the market’s reaction. In general, we view the repricing of rates as appropriate but continue to be perplexed on the easing that remains for broader financial conditions. With the month at the half-way point, and overall economic data painting a picture that inflationary pressures still linger, the upcoming FOMC minutes from the January meeting might shed light on what the committee is thinking. Net as we have said before, it’s not about what level the Fed gets to, but what are the conditions needed for them to stop hiking altogether.
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The announcement of the nominations for the new Bank of Japan leadership has been slow to materialize, but the nomination should be formally announced by the time this episode is published. Given it is likely that LDP political considerations have already been resolved we expect the Diet approval process to be quick. Are higher Dollar/Yen, Yen rates, Nikkei stock prices and wider Yen basis a good sign for the next Governor?
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido discusses the BoJ leadership nomination, cross border securities flows and shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
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