June 1, 2021
This week, the FX market has seen the pound rise to fresh new highs against the dollar. Lee Hardman, currency analyst, shares the reasons behind this and his thoughts on the recent surge in inflation which is sparking concerns that interest rates could go up as the UK economy bounces back.
Meanwhile, the People’s Bank of China has raised the required reserve ratio up by two percentage points for the first time in more than ten years - how this is impacting global currencies? Listen now for Lee’s analysis.
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May 28, 2021
Headline inflation rates across major emerging markets have been driven sharply higher in recent months by a potent combination of higher commodity prices, base effects and reopening reverberations. This development, in conjunction with the rapid improvement in global growth prospects, has forced numerous emerging markets central banks to react in order to tame inflationary pressures, while taking into account the challenge of distinguishing between temporary and transitory shocks.
This week, Ehsan Khoman, Head of Emerging Markets Research (EMEA), explains why he believes inflationary apprehensions across emerging markets are misplaced, taking into account that underlying core inflation remains subdued compared to historical shocks, and headline inflation remains below or within the target/target range in over 65% of inflation-targeting emerging markets at present.
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May 27, 2021
In this episode, we are pleased to introduce MUFG Head of U.S. Macro Strategy, George Goncalves. George briefly takes us through his strategy approach of the four pillars of a macro analysis, a process that he has fine-tuned and enhanced over his 20 years of being in the financial markets.
We discuss his outlook for the U.S. economy and what that means for rates and the Fed. In short, George’s view is that aggregate demand was pulled forward and thus the U.S. will see economic activity decelerate versus current trends and future expectations, but the Fed will still need to taper QE nonetheless.
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May 24, 2021
After a long period of excessive risk taking across global markets, recently issued financial stability reports indicate central banks are nervous. This week, Derek Halpenny, Head of Research Global Markets EMEA and International Securities, shares his top thoughts about how this shift could impact policy and monetary stance.
Derek also touches on Bitcoin and its role within financial markets, outlook for the Russian ruble and performance of the Euro Stoxx 50 Index.
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May 21, 2021
In one of the world’s most comprehensive energy roadmaps towards net zero emissions by 2050, the International Energy Agency (IEA) has laid out dizzyingly ambitious terms in what producers and consumers must do to meet the Paris climate accord goal of limiting global warming to 1.5oC above pre-industrial levels.
Ehsan Khoman, Head of Emerging Markets Research (EMEA), views that the IEA’s recommendations are nothing short of a complete transformation of the global energy system.
He believes it may prove challenging to transpire at the speed and magnitude as its net zero emissions trajectory necessitates, and instead the roadmap could be designed to provide clarity around the practicalities of increased climate ambition among countries, corporates and investors.
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May 19, 2021
In this episode, Glenn Schultz, MUFG Head of Agency Mortgage Prepayment Modeling and Strategy, talks about the reprieve we will see in prepayment speeds but indicates this is certainly not the end of the refinance wave. He also discusses his view on May prepayment speeds.
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May 18, 2021
Japan’s state of emergency has been expanded since last week to cover nine prefectures, including Hokkaido, Hiroshima, and Okayama. Japan’s government is setting up large-scale vaccination facilities and bearing down on its vaccination program. Dollar/Yen, Yen rate, and the Nikkei have only shown a limited reaction, but the global post-COVID-19 recovery trend appears to be spreading. This suggests limited downside for USDJPY, Yen rate, and the Nikkei.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido dissects securities investing flows over Golden Week and discusses the March Balance of Payment and April International Transactions in Securities data. He also shares his views for Dollar/Yen, Yen basis, and Yen rate.
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May 17, 2021
Investors are growing concerned about the continued threat of inflation. Is this build in inflationary pressures transitory, or here to stay?
Lee Hardman, currency analyst, looks at the Fed’s view and gives his outlook as the dollar fails to build on gains from a stronger than expected U.S. CPI report last week.
Lee also looks at the outlook for the pound as apprehension about the new Indian COVID variant hampers reopening optimism in the UK.
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May 14, 2021
Despite the heavy toll that COVID-19 continues to exhibit across Emerging Markets (EM) in the EMEA region, a spring accelerated recovery is firmly in motion. Resilience is two-pronged:
(i) loosening of lockdowns; and
(ii) economies are now better adapted in accommodating the impacts of the virus.
Ehsan Khoman, Head of Emerging Markets Research (EMEA), believes that EM EMEA is entering a “sweet spot” amid resilient economic growth, subdued underlying core inflation dynamics, an improving COVID-19 picture and renewed investor optimism surrounding the next normal as the pandemic gradually enters the rear view mirror.
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May 13, 2021
Prime Minister Yoshihide Suga extended the state of emergency covering some parts of Japan late last week. Fukuoka and Aichi have been added to Tokyo, Kyoto, Osaka, and Hyogo as regions affected, while Miyagi Prefecture is no longer under coverage. While Dollar/Yen, Yen rate, and Yen basis have reacted to weak U.S. jobs numbers that fell short of expectations and plunging U.S. high-tech stock prices, the reaction to that as well as the extension of the state of emergency has been muted in the face of Yen selling flows.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido dissects Japan’s April monetary base and fiscal balance, as well as discusses May fiscal fund flows. He also shows his views for Dollar/Yen, Yen rate, and Yen basis.
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