The MUFG Global Markets Podcast

What impact will the BoJ’s policy adjustment have on the FX market? | The Global Markets FX Week Ahead Podcast

Lee Hardman, Senior Currency Analyst, and Seiko Kataoka-Fisher, Vice President from Japanese Customer Sales for EMEA in London, discuss the BoJ’s decision to make YCC more flexible and recent policy updates from the ECB and Fed.
Will the BoE deliver another hawkish policy update in the week ahead?

July FOMC Preview – One (more) and done? Likely the last hike but they will stay data dependent in case inflation flares up again…

George Goncalves, MUFG Head of U.S. Macro Strategy, expects the Fed to deliver one more hike of 25bps at the upcoming July FOMC meeting. The FOMC statement should not see major tweaks at this time of the year, largely given that it’s a July meeting that sits between Jackson Hole and the September FOMC meeting updates (and also because the June FOMC meeting saw the Fed upgrade its forecasts on growth, inflation and rates).  
In order for the Fed to keep all options open and avoid hinting that this may be their last hike they need to keep forward guidance in place by keeping this phrase largely unchanged “In determining the extent to which additional policy firming may be appropriate.”  As George has mentioned before, until chair Powell strikes out the inflation concerns from the opening remarks in the presser, they are focused more on fighting inflation versus being overly concerned about the trajectory for growth. The presser is what ultimately determines how markets read chair Powell’s tone if this July hike was a dovish, neutral, or hawkish hike. We are leaning on the neutral to hawkish side.

BoJ YCC Policy Update with a Tokyo Perspective | The Global Markets FX Week Ahead Podcast

Next week is a busy schedule for the financial markets with the FOMC, ECB and BoJ all meeting. Ahead of the BoJ meeting specifically, Derek Halpenny, Head of Research Global Markets EMEA & International Securities is joined by Sumino Kamei, Senior Analyst, Global Markets, to discuss possible outcomes of the BoJ meeting.
Sumino provides an update on market expectations from a Tokyo perspective following the BoJ comments this week that has seen YCC speculation subside and explains why MUFG Bank continues to think a change in policy could happen. Derek provides his thoughts on the FX impact and possible broader market implications.

ESG Series: COP28 expectations with four months to go – The journey from Bonn to Dubai | The Global Markets Podcast

Climate negotiators met at their inter-sessional climate talks, known as SB58 (the 58th meeting of the Subsidiary Bodies), between 5-15 June 2023, at Bonn, Germany. The deliberations were supposed to lay the foundations for progress at COP28, which is scheduled for 29 November – 12 December 2023, in Dubai. Yet, they also highlighted the many gaps that still need to be bridged.
Parties and groupings stuck mostly to their familiar negotiating positions across most issues at Bonn, though faint contours of progress were made on core issues of (i) loss & damage; (ii) Article 6; and (iii) the just transition.
Ehsan Khoman, Head of Commodities, ESG and Emerging Markets Research (EMEA), discusses MUFG’s latest ESG report that examines the current state of affairs of climate negotiations ahead of COP28 in November (see here for the full report).

What’s behind the latest leg lower for the USD? : The Global Markets FX Week Ahead Podcast

Lee Hardman, Senior Currency Analyst, and Jack Greenslade from the Global Customer Marketing Group discuss the reasons behind the latest sell-off and whether it will continue. Inflation is also set to remain in focus for markets in the week ahead with the release of the latest CPI reports from New Zealand, Canada, the UK, the Eurozone and Japan. 

2023 1st half review and 2nd half outlook

George Goncalves, MUFG Head of U.S. Macro Strategy, reflects on the price action and economic developments of the 1st half and provides us with thoughts on some of the risks that may lie ahead in the 2nd half. George believes that the markets caught a big break on the back of overly defensive posturing resulting in investors having to chase performance and close out short-positions and underweight level to benchmarks during the start of the year. Granted economic conditions in the U.S. were more favorable than initially feared, the overall global backdrop, especially on manufacturing side continues to weaken. Meanwhile we have central banks that have returned to hiking and the Fed has signaled that they are not done either after having skipped at the June FOMC. In our view, after a somewhat muted reaction to Fed tightening we believe the long and variable lags may actually hit harder now as we go through the 2nd half. George remains skeptical the regional bank crisis is fully resolved and that coupled with off-shore dollar liquidity draining could serve as a catalyst for risk-off.
 

Federal Reserve vs BoJ policy – USD/JPY reversal: The Global Markets FX Week Ahead Podcast

Following the US jobs report from the US and ahead of the CPI data next week, Derek Halpenny, Head of Research Global Markets EMEA & International Securities discusses with Michael Owen, MUFG’s Head of Global Client desk for EMEA in London, the consequences for Fed policy, rates and the US dollar.
Derek also discusses the outperformance of the Japanese yen this week, highlighting developments that point to risks of a YCC change at the next BoJ policy meeting on 28th July.
Disclaimer: www.mufgresearch.com (PDF)

Intervention risk is back in focus for USD/JPY - The Global Markets FX Week Ahead Podcast

The JPY has weakened sharply during June falling below last year’s lows. Lee Hardman, Senior Currency Analyst, and Simon Mayes, Director of MUFG’s Global Customer Marketing Group for EMEA in London, discuss what has been driving recent JPY weakness & the risk of intervention.   

What next for FX and rates after key Central Bank meetings? The Global Markets FX Week Ahead Podcast

After two event-packed weeks including the FOMC, ECB and BoE meetings and Fed Chair Powell’s semi-annual testimony, Derek Halpenny, Head of Research, Global Markets EMEA and International Securities, discusses with Shan Husain, Vice President FI FX Sales, what the implications are for FX and rates going forward.
Derek also looks ahead to the ECB Annual Forum on Central Banking in Sintra, Portugal next week and the key incoming economic data that will help shape the direction of financial markets.
Disclaimer: www.mufgresearch.com (PDF)

Mid-year emerging markets outlook – The Global Markets Podcast

Despite having to navigate the (i) war in Ukraine (and its reverberations on global energy and food prices); (ii) aggressive rate hikes; as well as (iii) draconian Chinese lockdowns, emerging markets demonstrated remarkable resilience in H1 2023.
In a world of tightening global financial conditions and questions about the liquidity implications of the now-finalised US debt ceiling, Ehsan Khoman, Head of Commodities, ESG and Emerging Markets Research (EMEA), expects a heightened degree of macro risks for emerging markets in H2 2023, with external funding requirements the central concern. Still, he believes the silver lining is that subdued growth should cap inflation, facilitating monetary policy easing where external balances allow.
Disclaimer: www.mufgresearch.com (PDF)