The MUFG Global Markets Podcast

FX market fallout from slowing inflation

Lee Hardman, Currency Analyst, and Reza Nasehi, Vice President of the Japanese Client Sales group for EMEA in London, discuss the impact on the FX market from further evidence of slowing inflation in the UK and US. Has the tide turned against the US dollar?
Disclaimer: www.mufgresearch.com (PDF)

FX consolidation ahead of key inflation data

The US dollar has recovered some of last week’s losses and Derek Halpenny, Head of Research Global Markets Research & International Securities talks to Michael Owen Head of Global Client Desk EMEA about what helped prompt a recovery of the US dollar this week.
With no single clear driver of FX and rates this week, Derek looks ahead to next week and the key inflation data from the US and employment and inflation data from the UK. Derek also provides an update on Global Market Research’s trade views.
 
Disclaimer: www.mufgresearch.com (PDF)

The MUFG Global Markets Podcast: 2023’s never ending conga line of black swan events

In today's episode, George Goncalves, MUFG Head of U.S. Macro Strategy, and Glenn Schultz, MUFG Head of Prepayment Modeling and Strategy, discuss October's remittance data, relative value against the backdrop of slower seasonal prepayment, and the outlook for the current coupon basis against the headwinds of 2023's never ending conga line of black swan events. 

Is the peak now in place for the USD and US yields?

Lee Hardman, Senior Currency Analyst, and Jack Greenslade from the Global Customer Marketing Group, discuss the main drivers behind the sharp adjustment lower for the USD and US yields over the past week.
Have we now passed the peak of US exceptionalism priced into FX markets?  
 
Disclaimer: www.mufgresearch.com (PDF)

Quick FOMC preview as the BoJ and Q.R.A. take the spotlight: The MUFG Global Markets Podcast

This week George Goncalves, MUFG Head of U.S. Macro Strategy, takes us around the world and back, discussing the latest changes from the Bank of Japan (BoJ), ahead of October month-end trading and the critical double-header events on November 1, when the Treasury releases its quarterly refunding announcement (Q.R.A.) for its Treasury supply needs. Then in the afternoon, the FOMC meets for its second to last meeting of calendar year 2023.
In George’s view, so long as term premia stays elevated and 10yr rates do not decline back towards the low 4s, these higher long-term rates are doing the tightening for the Fed, and thus the Fed hiking cycle is likely over (where the July hike may end up being the last hike of this cycle). In addition, what is frightening about October 31, other than the spooky Halloween scenes, is that this means there are only two months left in the year and liquidity probably gets worse for markets from here on out. Lastly, George wraps up by providing his views for Fed day, expecting another “hawkish skip”, the second in a row, and that chair Powell will refrain from saying they are done by keeping December in play.

FX vol could spike with busy week ahead

Swings in the 10yr UST bond yield reverberated into the FX markets this week with the EUR/USD intra-day high-low weekly range the widest since mid-July. Derek Halpenny, Head of Research, Global Markets EMEA & International Securities, talks to Simon Mayes, Head of UK, Ireland and Swiss Corporate Sales, about the continued resilience of EUR/USD and what might be behind it. Derek also looks ahead to next week with the BoJ, FOMC and BoE all meeting and explains why the BoJ needs closest watching after USD/JPY broke higher through 150 this week.
Disclaimer: www.mufgresearch.com (PDF)

New highs for US yields but not the USD

Lee Hardman, Senior Currency Analyst, and Andrea Hayward, Vice President of the Japanese Client Sales Group for EMEA in London, discuss how rising Middle East tensions and higher US yields are impacting the FX market. Will the upcoming BoC and ECB policy meetings prove to be market-moving in the week ahead?

Examining Middle East geopolitical risks and sovereign spreads

Our thoughts continue to be with those affected from the conflict in Israel and Gaza. 
In this week’s podcast, Ehsan Khoman, Head of Commodities, ESG and Emerging Markets Research (EMEA) at MUFG, draws on historical lessons learnt in order to contextualise the current elevated level of geopolitical risk premia across sovereign spreads.

The State of Housing Edition: The MUFG Global Markets Podcast

This week in a special edition podcast episode, George Goncalves, MUFG Head of U.S. Macro Strategy, is joined by Glenn Schultz, MUFG Head of Prepayment Modeling and Strategy, to go over a recently published and comprehensive Desk Strategy Report called “The State of Housing” where they explore the impact of high mortgage rates and affordability issues that are impacting the U.S., as well as the potential lasting effect on housing and mortgage macro fundamentals ahead.
George walks through how these higher rates are unsustainable for a viable housing and mortgage financing market and unless incomes were to rise, and rise at a much faster rate, that something has to give (either house prices decline, and/or rates decline). Glenn threads in the implications to MBS issuance, CPRs, and how the market might be the most negative convexity it has been given the larger loan balances. George wraps things up by discussing how this might influence the Fed rate views and their MBS portfolio.
 

Geopolitics vs Macro in the Week Ahead

The week is coming to a close with signs of risk aversion with the focus on the Israel conflict and the risk of this broadening in the region. Derek Halpenny, Head of Research Global Markets EMEA & International Securities talks to Michael Owen, MUFG's Head of Global Client Desk for EMEA in London, about the possible consequences for the markets and why recent signs of a pick-up in economic activity in China could prove important for the US dollar.