The MUFG Global Markets Podcast

Debt ceiling impasse shall pass but is it distracting us from other larger risks ahead?: The MUFG Global Markets Podcast

George Goncalves, MUFG Head of U.S. Macro Strategy, returns to give us an update on the current status of the debt ceiling negotiations. He explores scenarios of how this impasse may conclude and potential market implications. George also takes us through his latest Fed thinking, taking into account all of the recent Fed speakers. He also provides us with a mini-preview of what to expect at the June FOMC meeting. George looks further down the road on how the Fed may shift towards easing and what to do with QT and the supersized RRP. Lastly, if that was not enough to get one’s arms around, George provides a list of what else is on his risk radar.

Strength in the Nikkei and Dollar/Yen stand in sharp contrast to lackluster price action in JGBs and cross-currency basis: The MUFG Global Markets Podcast

The Nikkei Average and Dollar/Yen keep climbing higher. Meanwhile, Yen rate and Yen cross-currency basis remain little changed. Now that the G7 Summit in Hiroshima is over, speculation about whether Prime Minister Fumio Kishida will disband the Lower House and call for elections is growing.
In today's episode, MUFG Chief Japan Strategist Takahiro Sekido gives his view on triggers in the wake of the G7 Summit in Hiroshima as well as his analysis of the latest April JSDA data. He also shares his outlook for spot Dollar/Yen, Yen rate, and Yen basis.
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Is USD strength sustainable? The Global Markets FX Week Ahead Podcast

Optimism of a deal being agreed to lift the debt ceiling in the US has helped lift the dollar this week. Derek Halpenny, Head of Research, Global Markets EMEA and International Securities, explains to Shan Husain, Vice President, FI FX Sales, why he remains unconvinced over the sustainability of the move stronger for the dollar and expects the positive momentum to fade.
Derek looks ahead to next week with UK inflation also in focus which will be key for the outlook for the pound.
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Will the current bearish mood in crude oil markets last?: The MUFG Global Markets Podcast

Demand angst – US banking turmoil, debt ceiling risks, recessionary fears and financial scarring through low liquidity – has dominated crude oil markets for much for 2023 so far. Our central narrative in our 2023 energy markets outlook was premised on a large H2 2023 deficit (see here), with international energy agencies and market consensus increasingly singing from the same hymn sheet. With this, attention is turning to whether the near 15% selloff crude oil year-to-date is about to reverse given the looming tightness ahead.
Ehsan Khoman, Head of Commodities, ESG and Emerging Markets Research (EMEA), contextualises the current state of affairs in global oil markets, and offers his perspective as to why accelerated growth in EM demand, deep OPEC+ production cuts and lethargic US supply are expected to drive oil prices constructively higher by the summer.
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How will political developments impact monetary policy in Japan?: The MUFG Global Markets Podcast

Dollar/Yen is higher, Yen rates are little changed, and Yen cross-currency basis has started to widen slightly. Major Japanese banks have released their FY23 earnings results in mid-May, to be followed by major lifers. Bank of Japan Governor Kazuo Ueda will be watching financial system stability as he determines his next monetary policy steps.
In today's episode, MUFG Chief Japan Strategist Takahiro Sekido discusses recent political developments, cross border flows, and implications for financial markets. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
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The Kings of Carry, Convexity Cross, and U.S. Debt Ceiling Brinksmanship: The MUFG Global Markets Podcast

In today’s episode, MUFG Head of Prepayment Modeling and Strategy, Glenn Schultz, reviews April remittance data highlighting the ‘Kings of Carry’ and relative value around the convexity cross, and the outlook for the agency mortgage basis given the FDIC liquidations current U.S. budget negotiation. He also discusses the possible implications of the debt ceiling brinksmanship on both the GNMA and Conventional MBS sectors.
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What’s behind the USD rebound? The Global Markets FX Week Ahead Podcast

Lee Hardman, Senior Currency Analyst, and Michael Owen, Head of Global Client Desk EMEA, discuss the USD’s recent performance and Bank of England’s policy update. After a better week for the USD, is the tide beginning to turn?  
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ESG Series: Further guidance into Europe’s response to the US Inflation Reduction Act – The MUFG Global Markets Podcast

On 5 May, the German government presented draft legislation that appears to be the first granular direction into the European response to the US Inflation Reduction Act (IRA) (the largest climate legislation in US history) at the national level that compliments the European Commission’s Net Zero Industry Act (NZIA) unveiled on 16 March. If approved, this German proposal may serve as an IRA template for other European member states, fast-tracking renewables as well as green financing to lower the cost of capital.
Ehsan Khoman, Head of Commodities, ESG and Emerging Markets Research (EMEA), discusses why this promising German proposal may serve as a template for other European member states to follow suit, which reinforces the conviction that the current goldilocks era of regulation will carve the contours of a renewables capex supercycle (see here for the full report).
 
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What to expect as Japan returns from Golden Week – The MUFG Global Markets Podcast

During Golden Week, the FOMC held its May meeting while the US regional bank sector remained riddled by credit concerns. Despite all that, the lower side of the USD/JPY was solid and the rise of Yen interest rates and widening of Yen basis were limited. If investment flows from Japanese investors pick up after Golden Week as we expect, USD/JPY, Yen interest rates, and Yen basis will become more volatile.
In today's episode, MUFG Chief Japan Strategist Takahiro Sekido reviews the JSDA data for March, as well as April fiscal and BoJ fund flows and implications. He also shares his views on spot USDJPY, Yen rates, and Yen basis.
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Is the outlook worsening 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 key takeaways for the FX market covering the latest policy updates from the Federal Reserve and European Central Bank.
The Bank of England is the next major central bank to update policy in the week ahead but will it alter the pound’s bullish momentum? 
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