The MUFG Global Markets Podcast

USDJPY is off the highs as the Dollar gives back a portion of recent gains. JGB yields reflect the strength of the Bank of Japan’s yield control operations as an increase in buybacks last week helped the super long sector recover. USDJPY basis has tightened on both strong demand for JGBs from foreigner investors and Japanese investor selling of foreign bonds. Amidst the market volatility in G10 rate markets and the October BoJ meeting non-event, we expect the Tokyo market to reflect a mixture of JGB flows among Japanese and foreign investors, foreign companies’ JPY Samurai bond issuance, and Japanese companies’ overseas investing activities.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido dissects H2 FY22 Japanese life insurance company investment plans, discusses the Samurai bond market, and summarizes high points from the BoJ’s October policy meeting. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
 

MUFG Head of U.S. Macro Strategy George Goncalves provides an update on the bullish risk market price action and thinks too much good news around a potential Fed pivot is already priced-in. George provides his base case FOMC meeting views and provides both dovish and hawkish scenario outcomes. Bottom line, we expect team pivot (those expecting Fed to transition policy) will be let down again as the Fed is committed to getting inflation under control. 
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After another weak of US dollar depreciation, Derek Halpenny, Head of Research Global Markets EMEA and International Securities, discusses with Julie Ellert, Head of Frabelux Corporate Sales, Paris branch, whether this US dollar sell-off will be sustained into next week.
It’s a big week for the US dollar and the broader financial markets - the FOMC meeting on Wednesday is set to dictate whether the negative US dollar sentiment will persist or not.
Derek also discusses what the central bank meetings this week mean for the FX markets, in particular how the Bank of England meeting next week will impact the pound.
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In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves discusses how the developments in the bond markets have been more logical lately, especially around key macro events. Whereas risk assets, like the performance of equities, have been more perplexing. George attributes the multiple bounces higher for stocks over the last month as a function of “bearish exhaustion” as investors try to determine if a solid bottom has been put in for 2022. George believes that broader markets are perhaps confusing a potential Fed pause as a pivot, and even then it’s still too early for the Fed to be signaling a transition in policy given how high inflation remains.
George gave us a glimpse of some of the risk factors into the end of 2022. He is most worried about liquidity risk after one of the worst bond market performances in history. Meanwhile, what has been happening in the FX markets suggest that dollar liquidity and access could be an issue into year-end. For now, we need to get through the next Fed meeting and the mid-term elections before we can have a better outlook on how this year may end.
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Currency intervention capped USDJPY at the 152-mark, but Yen selling flows dominate, and the uptrend for USDJPY has not been thrown off course. Upward stresses on JPY rates are deep-rooted, but the BoJ has been able to cap rates with its yield control operations. JPY bond arbitrage trading flows by foreigners and Japanese investors’ selling of foreign bonds have caused the belly of the JPY basis curve to tighten, but the front end has been dominated by Japanese investors’ funding of USD assets over year-end.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido updates us on the cross asset flows during the month of September and also previews the October BoJ policy meeting. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
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Lee Hardman, Senior Currency Analyst, and Michael Owen, MUFG’s Head of Global Client desk for EMEA in London, discuss the latest political instability in the UK following the resignation of Prime Minister Truss.
How will the upcoming leadership election affect GBP performance in the week ahead? Furthermore, what is the potential market impact from the BoJ’s and ECB’s latest policy meetings? Listen to Lee’s analysis here.
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In this episode, MUFG Head of Prepayment Modeling and Strategy Glenn Schultz discusses the October remittance data and outlines our thesis of the ‘Second Golden Age of Mortgage Backed Securities.' He reviews how the evolution of the coupon stack, borrower and loan characteristic diversity, and the normalization of interest rates converge to bring about the dawn of a second golden age for mortgages. 
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The upward trajectory of Dollar/Yen is driving cross-currency basis wider. Yen rate has been relatively stable thus far, which stands in stark contrast to GBP and other G10 bond markets. How the Bank of Japan’s yield control policy withstands stresses in Gilt and other global bond markets remains an open question.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido reviews cross-border securities flows during the volatile price action that occurred during the months of August and September, as well as additional insights from the quarterly Tankan survey. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
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A major policy U-turn is underway in the UK and levels of volatility are high as the week ends. Derek Halpenny, Head of Research Global Markets EMEA and International Securities, outlines to Matthew Carvell, Director of Spot FX Trading at MUFG, what this might mean for the UK markets and GBP. Has Liz Truss done enough to restore confidence and is Jeremy Hunt a wise choice as Chancellor? Derek also discusses the US CPI print and what the data means for the FOMC and the US dollar.
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In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves marks to market what he believes was another head-fake move at the start of Q4 trading. The roundtrip price action that we have seen in the last week or so of trading in both bonds and stocks – which saw massive rallies unwind into this new trading week – reminds us that many investors are still enamored with the buy-the-dip approach versus selling-the-rips stance that we have been advocating for a while, which are more common trading strategies in bear markets. We go into what to expect from the FOMC minutes and the upcoming inflation reports. Given the consistency of Fed speakers of late, we would be shocked if they signal anything specific to what would get them to pivot before seeing inflation clearly heading lower. Economists expect another elevated inflation reading and even if it comes in weaker, we do not believe one data print or two would get the Fed to deviate from its hawkish goal of front-loading as many hikes as possible in 2022. Whereas a high CPI print runs the risk of shocking us into a bigger risk-off. That would be an issue as markets are on their backfoot and hugging multi-week trend supports, especially in stocks, but even bonds are at risk of a push to 4% across all curve points.
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It has been another volatile week in the FX market as the USD and US yields have corrected lower. Lee Hardman, Senior Currency Analyst, and Simon Mayes, Director of MUFG’s Global Customer Marketing Group for EMEA in London, discuss whether it is too soon to expect a dovish Fed policy pivot and sustained reversal of USD strength.
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In today’s episode, Hailey Orr, MUFG Capital Markets Strategist, discusses her team’s most recent publication: Casualties of Tightening (The Historic Rise in Global Central Bank Policy Rates). Hailey speaks to the idea of “synchronicity”, where she takes us through the remarkable YTD sell-off of nearly every risk asset on the planet. She also goes over how the current global policy tightening cycle differs from past cycles and which areas in the market are bearing the brunt, and expectations for the Fed tightening cycle going forward.
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In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves provides us with an update on how markets got back to dreaming of Fed pivots again after such a terrible performance in September. He also walks us through some of his main themes in the latest Macro2Markets Monthly called: A sea of doom (loops) as FCI tightens further. George remains skeptical of what could be another bear market rally in the making and attributes the recent price action to positioning and sentiment having gotten too bearish-leaning. That said, George does not believe there is an imminent Fed reversal and that the Fed needs financial conditions to tighten even further in order to clamp down on aggregate demand and contain inflation into the new year. It’s also interesting to hear how George defined the criteria for what he dubs the end of the bond bull run, but that said, it doesn’t mean the start of the bear market in bonds is ahead either.
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Spot Dollar/Yen has consolidated below 145 after the Japanese Government intervened to buy Yen for the first time since 1998, while Yen rate and basis have been little changed. Going forward an extraordinary session of the Diet is scheduled to convene this month, and we expect the Kishida Administration to announce inflation countermeasures, as well as a second supplementary budget.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido discusses the September BoJ meeting, Tankan survey, and his outlook for Yen assets across markets for the month of October. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
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Another week of wild swings in the financial markets saw the UK take centre-stage. Derek Halpenny, Head of Research Global Markets EMEA and International Securities, provides Shan Husain, Vice President, FI FX Sales, with a view on what might happen next for the pound. A renewed decline seems plausible - especially given the likely continuation of tightening financial conditions globally.
Derek also discusses JPY moves with USD/JPY rebounding notably from the post-intervention lows.
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It has been another volatile week in the FX market as the USD has surged to fresh year-to-date highs. Lee Hardman, Currency Analyst, and Simon Mayes, Director of MUFG’s Global Customer Marketing Group for EMEA in London, discuss the main drivers of further USD strength and whether intervention from Japan will prevent further upside for USD/JPY.
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In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves provides an update on his latest views post the recent volatility in markets. George believes the gap between rate expectations and risk assets are closing. Post the hotter than expected CPI print, the Fed is not going to pivot any time soon as many initially were hoping. George provides his base case for the September FOMC with expectations of another 75bp hike higher in rates, the third in a row, along with higher dots, too. George expects Chair Powell to deliver a message that is consistent with his speech from Jackson Hole, which was hawkish.
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Dollar/Yen is now trading in a narrow range below 145 ahead of the FOMC and BoJ September meetings. Yen rate and basis have paused after rising and widening, but we expect volatility to pick up once the BoJ meeting is over.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido dissects the impact of Yen money supply/demand as well as inflationary pressures ahead of the BoJ’s meeting. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
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The financial markets are braced for a busy week next week, with six G10 central bank meetings, and all are expected to hike rates apart from the BoJ. This week, Derek Halpenny, Head of Research for Global Markets EMEA and International Securities, discusses with Chris de Sibert, Head of Institutional Investors FX Sales for EMEA, the threat of JPY intervention after comments from Tokyo this week and ahead of the BoJ meeting next week.
Derek also covers some of the other central bank meetings next week, including the Federal Reserve, and what to expect in the foreign exchange markets.
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In this episode, MUFG Head of Prepayment Modeling and Strategy Glenn Schultz discusses the August remittance data and shares his views on turnover and refinancing activity in the moderately seasoned cohorts, valuation across the agency MBS coupon stack, specified pool sectors, and CMOs.
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Dollar/Yen has found solid footing above 140, and Yen rate and basis, as well as the Nikkei Average have leveled off. All eyes remain on the Fed and the U.S. Treasury market for direction on Japanese financial markets. 
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido shares his take on recent cross border investment data and the implications of recent changes to BoJ current deposit accounts, and also discusses developments in the Tokyo repo market during July and August. He also shares his views on Dollar/Yen, Yen rate, and Yen basis.
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This week, Lee Hardman, Currency Analyst, and Reza Nasehi, Vice President of the Japanese Client Sales Group for EMEA in London, discuss the volatile price action in the FX market which prompted Japanese policymakers to step up concern over JPY weakness.
Reza and Lee also discuss implications for the FX market from the ECB’s latest policy update and the new UK Prime Minister Liz Truss’s energy relief package.
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USDJPY is through 140. In contrast, JPY rates have risen gradually, JPY cross-currency basis is mixed – tighter in the front end on foreign demand for short-term, while wider in the belly through the long end of the curve – and the Nikkei Average is flat. It would not be unexpected for Japanese exporters to cover USDJPY ahead of the quarter-end, pushing USDJPY even higher.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido reviews what was an eventful end of the summer, shares his outlook for September, and discusses the BoJ’s JGB buying plans and the Ministry of Finance’s JGB yield assumptions in its FY23 budget proposal. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
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In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves recaps the key events of the last couple weeks of trading into and out of the Labor Day holiday in the U.S. He discusses the renewed hawkishness by central banks, which were taken up a notch at Jackson Hole. Meanwhile, Fed speakers kept the hawkish tone alive post-event, which has helped keep the direction of rates higher since. George highlights that a big driver of the U.S. rates move, especially out the curve, was the global rise in rates, where European and U.K. rates have actually risen more than what we have witnessed in Treasuries. Looking ahead, George will be watching if Fed speakers keep delivering a consistent message, and how hawkish or not the ECB will be at its upcoming policy meeting this week. George concludes that the Fed will likely do 75, so long as market pricing is at least 50/50 chance of a 75 hike at the September meeting.
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