The MUFG Global Markets Podcast

USDJPY has retreated to the 122 level, and the 10Yr JGB yield is back to the 0.21% level after hitting 125 & 0.25%, respectively. USDJPY basis is off the wides. The Nikkei Average is treading water just under the 28,000 mark despite the reorganization that took effect this month.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido reviews JPY asset pricing and flows in March, looks ahead to April JPY triggers, and discusses the key points of the March Tankan survey. He also shares his views on Dollar/Yen, Yen rate, and Yen basis.
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In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves reviews his recently published macro thematic report on our latest views for the U.S. outlook in the next 18 months as well as a review of markets in and out of the first hike in this cycle. George feels that the rates market is operating to a “back to the future” tightening cycle that has fast-forwarded all the Fed hikes into and out of the Fed’s first move. This has led to a cascading of curve flattening (with a number of curve spreads going inverted in the process) as the market is skeptical the Fed will get far.
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The Nikkei Average, USDJPY, and JPY rates are all up, while the front end of the JPY basis curve has widened. Real demand for resources has caused JPY to weaken ahead of the fiscal year-end, and the Kishida Administration has unveiled inflation countermeasures. On Monday, March 28, the Bank of Japan announced multiple fixed-rate JGB buying operations to cap 10Yr JGB yields at 0.25%.In today's episode, MUFG Chief Japan Strategist Takahiro Sekido dissects the BoJ's fixed rate JGB buying operations and JPY cross-asset flows in February. He also shares his views on the Dollar/Yen, Yen rates, and Yen basis.
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Fed officials have sent a strong signal over the past week that they will deliver more front-loaded tightening in an attempt to regain control over surging inflation. A larger 50bps rate hike is now the base case for the May FOMC meeting. The sharp adjustment higher in US yields has hit the yen the hardest.
Lee Hardman, Currency Analyst, and Michael Owen, MUFG’s Head of Global Client desk for EMEA in London, discuss the implications for the FX market from the Fed’s shift in policy, and Japanese policymakers reaction to more acute yen weakness.
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In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves summarizes the current rates and curve dynamics post the first Fed hike of this cycle. George is pretty emphatic that the U.S. bond market needs to hold the line—which is short for saying that we are in the intersection of some key technical metrics and market structure factors—and that this perhaps is the most important time in the bond market’s history to date.
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Last week, Prime Minister Kishida decided to lift all remaining quasi-emergency measures introduced to slow the spread of COVID-19. The Bank of Japan is focusing on normalizing monetary policy ahead of the post-pandemic era as inflationary pressures build around the world. The Nikkei Average and USDJPY reflect the shift in events in Ukraine, and JPY basis reflects the sense of crisis.In today's episode, MUFG Chief Japan Strategist Takahiro Sekido deliberates the attributes of U.S. bond flows among Japanese and Asian investors more broadly, as well as the BoJ's March meeting and policy outlook. He also shares his views on the Dollar/Yen, Yen rate, and Yen basis.
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While the focus is very much still on the potential fallout from the Russian invasion of Ukraine, this week did also include three key central bank meetings – the Federal Reserve, the Bank of England and the Bank of Japan.
Derek Halpenny, Head of Research for Global Markets EMEA and International Securities, discusses the differing messages from each of these market-moving meetings with Michael Owen, Head of Global Client Desk EMEA.
What are the FX implications going forward in the context of the continued optimism over the prospects of peace talks reaching a positive outcome? Listen now for Derek’s outlook.
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In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves discusses the intra-meeting price action between the last FOMC through today and spells out what to watch for in the Fed’s updates for the economic outlook and rate path ahead (i.e. the dot plot). George expects the Fed to try to thread the needle as a lot of hikes are already priced-in.
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The unknowns surrounding the war in Ukraine continue to swirl. USDJPY has risen, along with commodities prices. But risk aversion has supported lower JPY rates, and USDJPY basis has widened. Japanese investors have been covering their USD fund positions ahead of the fiscal year-end, but MoF data shows that foreigners have been cutting their exposure to Japan stocks even as purchase JGB asset swaps. In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido previews the Bank of Japan’s March Monetary Policy Board meeting. He also discusses the impact of the war in Ukraine on Japan’s bank sector and domestic inflationary pressures as shown in corporate prices as well as shares his views on Dollar/Yen, Yen rate, and Yen basis.
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In this episode MUFG Head of Prepayment Modeling and Strategy Glenn Schultz discusses the transition of the mortgage prepayment landscape to one dominated by turnover and burnout rather than refinancing. He discusses why he believes that turnover will become the dominant theme in 2022. He takes a balanced look at the specified pool sector, identifying the ‘Kings of extension protection” and “Princes of call protection.” Finally, he discusses his views on the recent widening trend in the current coupon basis.
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The war in Ukraine rages on and Japan stocks have marked a year-to-date low. USDJPY basis is volatile, amidst mixed trading by Japanese and foreign investors. Downside for USDJPY has been limited even despite the risk-off sentiment in the market reflecting surging oil prices, risk aversion, and fiscal year-end factors, while in contrast all these factors have put a bid into JGBs. Although not obvious, JPY asset price action remains in line with the microstructure of the Tokyo market post-pandemic. 
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido shares his outlook for JPY cross assets in March and also looks back at fiscal and BoJ monetary operations, as well as securities investing flows in February. He also shares his views on Dollar/Yen, Yen rate, and Yen basis.
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There are growing signs in the financial markets that the fallout from sanctions on Russia following its invasion of Ukraine is spreading, with Europe in particular beginning to show contagion. It has created a more uncertain backdrop for the ECB ahead of next week’s policy meeting.
Lee Hardman, Currency Analyst, and Michael Owen, MUFG’s Head of Global Client Desk for EMEA in London, discuss the implications for the FX market and what to expect from the ECB’s policy update.
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In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves discuss the recently produced report on geopolitical analysis and historical experience of markets and the Fed during prior events. George emphasizes that it's early days to draw any strong conclusions, but he is comfortable with his views that it all comes down to how financial conditions evolve ahead.
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Ukraine is in chaos following the invasion by Russia. The Nikkei Average has responded by weakening, but USDJPY and JPY rates have not fallen markedly, staying level at around 115 and 0.20% respectively. In contrast JPY basis widened significantly. Expelling Russia from the SWIFT system has increased USD asset funding costs for Japanese investors.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido dissects market uncertainties caused by the Ukraine invasion and discusses JPY cross-asset pricing and JPY cross-asset flow from the January JSDA data. He also shares his views on Dollar/Yen, Yen rates, and Yen basis.
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The Russian invasion of Ukraine has so far had a brief and relatively muted impact on FX in the G10 space, with the initial risk-off reaction yesterday reversing quickly. Why is this? Derek Halpenny, Head of Research for Global Markets EMEA and International Securities, talks to Michael Owen, Head of Global Client Desk, EMEA about the FX reaction to the Russia-Ukraine conflict and how the markets might play out going forward.
Derek expects greater focus on inflation and central bank action next week given Fed Chair Powell will present the semi-annual testimony to Congress.
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The risk of renewed conflict between the Ukraine and Russia has contributed to more volatility in FX markets over the past week. The shift in focus has temporarily taken the spotlight away from expectations for central policies - but for how long?
Lee Hardman, Currency Analyst, discusses what these geopolitical risks could mean for FX market performance going forward with Simon Mayes, Director of MUFG’s Global Customer Marketing Group for EMEA, in London.
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In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves discusses the implications of the break above 2% on the 10-year Treasury and how sustainable is the move in the near-term versus longer-run for the U.S. markets and the economy. He also discusses how U.S. credit is in the cross hairs of higher rates and risk market volatility.
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JGB rates rose last week, and the Bank of Japan offered fixed-rate JGB buying operations on February 14. USDJPY downside has been firm, and JPY basis returned to its previous level after first widening. The Nikkei Average has been soft, reflecting the slump in U.S. stock prices. The firmness of USDJPY downside and USDJPY basis volatility have been impressive. Looking ahead, we expect the BoJ yield curve control operations and cross-border investment flows to be the driver of JPY asset price action.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido discusses the nuances of the BoJ’s fixed rate buying operation as well as the attributes of securities investing flows from last week’s Balance of Payment data. He also shares his views on the Dollar/Yen, Yen rates, and Yen basis.
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After another week of huge moves in rates markets, where does this leave FX? Shan Husain, Vice President of FI FX Sales, asks Derek Halpenny, Head of Research Global Markets EMEA and International Securities, why the US dollar has performed so poorly given another higher than expected CPI print which led to the significant move in short-end spreads, which should have been in favour of the currency.
It has fuelled speculation of the Fed moving 50bps or even hiking inter-meeting. Derek also discusses the Japanese yen implications ahead of the planned BoJ unlimited fixed-rate JGB buying next week and updates listeners on MUFG Research FX trade ideas.
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In today’s episode, Glenn Schultz, MUFG Head of Agency Mortgage Prepayment Modeling and Strategy, discusses the regime change he has witnessed in Agency MBS prepayment during the most recent refinance wave and its implications for investors. Glenn discusses its impact on option adjusted spreads, MBS option costs, and nominal spreads, as well as the risk to his 2022 issuance outlook as a result of a higher 30-year mortgage rate.
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In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves provides an update on what has been driving the U.S. bond market post the FOMC meeting. The hawkish pivot has gone global post the recent ECB shift and BoE hawkishness. This has resulted in a multi-sigma move in Euro rates, which are impacting U.S. rates. George takes us through a few scenarios around the Treasury auctions and the upcoming CPI report.
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An upward trend on JPY rates has taken hold, in tandem with rates in the U.S. and Europe. JPY basis has also been widening. The Nikkei Average and USDJPY have not moved as much as JPY rates or JPY basis. The JPY and USD bond markets are mutually dependent, and bond investors have been adjusting their positions more actively.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido discusses the recent sell-off in the JGB market including the impact of monetary and fiscal operations. He also shares his outlook for Dollar/Yen, Yen rate, and Yen basis.
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The BoE and ECB have followed the Fed by delivering hawkish policy updates this week, reinforcing the sharp sell-off in global bond markets. It was an important policy pivot for the ECB, who opened the door to rate hikes later this year.
Lee Hardman, Currency Analyst, discusses what this means for performance of the euro and the broader FX market implications from rising yields with Simon Mayes, Director of MUFG’s Global Customer Marketing Group for EMEA in London.
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While USDJPY and JPY rates have started to rise notably, upside for the Nikkei Average has been heavy and JPY basis has tightened. Monetary policy normalization will likely pick up in 2022 as the effects of the COVID-19 pandemic fade. Tokyo markets will not necessarily react as they have in the past, and changes could be substantial. This is because of structural changes to both Japanese and foreign investors JPY cross asset trading.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido dissects the attributes of cross-currency JPY repo trading in Tokyo and discusses BoJ Monetary Policy. He also shares his views on the Dollar/Yen, Yen rate, and Yen basis.
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