The MUFG Global Markets Podcast

Japanese investors’ appetites for EUR bonds and EURJPY cross-currency swaps: The MUFG Global Markets Podcast

Concerns about a second wave of the COVID-19 pandemic have seen global stock markets plummeting. With pressure on the natural resources sector, this provides opportunity for the JPY to strengthen against currencies of countries dependent on this sector. Despite Japanese investors keeping up their JPY 1 trillion per week pace of overseas medium- and long-term bond buying during June, JPY has not seen substantial weakening.
In this episode, Takahiro Sekido, Chief Japan Strategist of Global Markets Research, MUFG Bank Tokyo discusses Japanese investors' EUR bond flows and the impact on EURJPY forward and basis swaps, as well as updates of his view on the Yen, JPY rates and USDJPY cross-currency basis.

Not yet out of the woods: The Global Markets FX Week Ahead Podcast

The escalation of COVID-19 cases in the U.S. is putting the markets on edge, but isn’t enough to dislodge increased positive investor sentiment for now.
This is, however, leading Derek Halpenny, Head of Research for Global Markets, to believe risks are to the downside.
This week also sees Derek delve into how mobility data is showing how Europe is managing the spread of COVID-19 in a way which is instilling greater confidence than the U.S., and why all eyes are on NZD and Canada’s debt riddled economy. 

The U.S. Economy: A collision course between COVID-19, an economic recovery and the November elections? The MUFG Global Markets Podcast

There are already signs of a vibrant economic rebound in the U.S. economy. Perhaps this isn't too surprising given the Federal Government’s fiscal response and the Federal Reserve's monetary response, which far exceed the Great Recession. Accordingly, MUFG forecasts a rebound in U.S. real GDP growth and in employment that is stronger than either the consensus estimate or the FOMC’s SEP economic projections.
This recovery, however, may be on a collision course with further community spread of COVID-19. And, to make things even more interesting, this would likely happen in the run-up to the November 3rd National Elections.
In this episode MUFG Rates Strategist, John Herrmann, reviews his "Year 2020 Strategy Update," including his view on second half growth, the path of COVID-19 and the reopening of the U.S. economy. He also shares what this all means for his core strategic investment stance of a 2s-30s yield curve steepener.
 

Everything You Always Wanted to Know About Japanese Life Insurance Companies * But Were Afraid to Ask – The MUFG Global Markets Podcast

US stock and oil prices are no longer surging. Although the upward trajectory of the last few weeks has not really worsened, the strong improvement in sentiment does seem to have taken a pause. In addition to the BoJ, the Fed also made a strong commitment to monetary easing at the June meeting. Looking forward, the global yields are likely stay low, and yield gaps amongst major economies are likely to stay tight. Amidst this stasis, Japanese Life Insurance Companies may be a critical driver of price action in foreign exchange and rates markets in the major currencies.
In this episode Takahiro Sekido, Chief Japan Strategist of Global Markets Research, MUFG Bank Tokyo discusses Japanese Life Insurance Company fiscal year 2019 financial results, changes investment flows and JGB duration risk, as well as updates his view on the Yen, JPY rates and USDJPY cross-currency basis.

GBP and USD outlook: The Global Markets FX Week Ahead Podcast

USD has seen a modest rebound, with dollar performance still very tightly linked to fluctuations in investor risk sentiment.
On the podcast this week, MUFG currency analyst Lee Hardman explains what is behind this trend and the correlation with equities.
Meanwhile in the UK, even positive developments such as the downgrade of the COVID-19 risk level aren’t enough to help the pound, which continues to underperform.
Listen below for Lee’s analysis on why this is and his forecast for GBP going forward. 
 

The April Balance of Payments data tells us USDJPY’s lower bound will remain robust – The MUFG Global Markets Podcast

The June FOMC confirmed that it plans to keep interest rates low, maintain monetary easing, and implement yield curve control. Looking ahead, USD could weaken and downward pressure on US rates could build. Near the end of this quarter, Japanese exporters will likely cover their USDJPY positions reinforcing this price action. However, we expect USDJPY’s lower bounds to remain robust because of Japanese Yen selling flow. 
In this episode Takahiro Sekido, Chief Japan Strategist of Global Markets Research, MUFG Bank Tokyo discusses JPY selling in the April Balance of Payment data, as well as selling from Japanese exporters and investors, and updates his view on the Yen, JPY rates and USDJPY basis.

Second wave fears: The Global Markets FX Week Ahead Podcast

This week, currency analyst Lee Hardman explains why it's premature to fear the worst after the largest U.S. equity market sell-off since March in the face of fresh outbreaks of COVID-19 in the U.S. and China. With the disappointing news that the UK economy collapsed by a record 20.4% in April, Lee also delves into the reasons behind the underperformance of GBP and explains why Prime Minister Boris Johnson's high level post-Brexit trade talks with Ursula von der Leyen today could be a breakthrough moment.

'We're not even thinking about thinking about raising rates...' The MUFG Global Markets Podcast

 
Chair Powell no doubt laid out a dovish outlook for the next few years, if not longer – a view that was shared by nearly all FOMC participants. The FOMC also opened the door for additional monetary stimulus, in a variety of forms. What should investors expect going forward?
 
In this episode MUFG Rates Strategist, John Herrmann, breaks down the June FOMC meeting and tells listeners what it means for the real economy, interest rates and his core strategic investment stance of a 2s-30s yield curve steepener.

JPY cross-border flows mitigated COVID-19 crisis stress for policy makers – The MUFG Global Markets Podcast

The yen has fully factored in first and second round’s supplementary budget and the establishment of a recovery fund in Europe. Position rewinding has weakened JPY, but we do not expect a trend toward more JPY selling positions. We expect Japanese investors to borrow USD early, ahead of the end of the month. Yet, for now USD funds are supplying operation for responding to the COVID-19 pandemic.
In this episode Takahiro Sekido, Chief Japan Strategist of Global Markets Research, MUFG Bank Tokyo discusses recent JPY cross-border flows’ impact on the BoJ’s YCC operations and JGB markets with his view on the Yen, JPY rates and USDJPY basis.
 
 

The Fed, front and centre: The Global Markets FX Week Ahead Podcast

Recent job figures from the U.S. look promising on the surface, but there's still a long way to go until a full recovery. This puts Wednesday’s Fed meeting front and centre, with heightened calls for continued stimulus.  Derek Halpenny, Head of Research for Global Markets, discusses why he believes the U.S’s debt profile is ‘mindboggling’ on today's podcast, and delves into analysis on a number of other developments across Europe in the past few days, including the fiscal stimulus package announced by Germany. 

Could more historic job loss prove a turning point for the U.S. labor market? The MUFG Global Markets Podcast

The weakness in U.S. nonfarm payrolls, or rather in employment more broadly, over the months of March-April-May is quite utterly without precedent. 
 
With weekly initial jobless claims having surged near 10 million on a month-over-month basis, the May employment report will, no doubt, show tragic job loss. That being said, the re-opening of America over the month of May offers hope that the job market and  the economy is starting to stabilize.
 
In this episode, MUFG U.S. Rates Strategist, John Herrmann, previews the May employment report, including his forecasts for non-farm payrolls and the unemployment rate. He also explores the implications of those forecasts for the Federal Reserve and the yield curve.
 

BoJ yield curve control to go global? The MUFG Global Markets Podcast

Tensions between the U.S. and China have weighed on USDJPY, while in other markets the improvement in risk sentiment has prevailed. With Japan’s State of Emergency lifted, Cabinet approval of a second supplementary budget and an increase in JGB issuance, USDJPY can be considered firm. However, our Chief Japan Strategist does not have a bullish bias so any breach of the 200-day moving average (108-109) would require further catalysts.
In this episode Takahiro Sekido, Chief Japan Strategist of Global Markets Research, MUFG Bank Tokyo discusses revisions to the Japanese government’s fiscal year 2020 budget, implications for financial markets, cross border flows and his view on the Yen, JPY rates and USDJPY basis.

An unprecedented recession: The Global Markets FX Week Ahead Podcast

In what could soon be known as one of the shortest recessions in history, market optimism is being reinforced by continued lockdown reversals throughout major economies, central banks coming out swinging and evidence showing no pick up in COVID-19 cases. Will this last?
Hear predictions from Derek Halpenny, Head of Research for Global Markets, as he gives his outlook on keeping a neutral view on USD and for the future of GBP as Brexit negotiations loom.

Strains in U.S. and China Ties – Rhetoric or Reality? The MUFG Global Markets Podcast

The Coronavirus pandemic has taken an already strained U.S.-China relationship and made it considerably worse. Interdependent but distinct issues like trade, national security, Taiwan, Hong Kong and human rights make this topic a particularly treacherous one for investors to navigate.
In this episode MUFG Washington DC Representative Office's Hana Rudolph, reviews recent developments in the U.S.-China relationship. She also explores how these strains could impact trade relations in the near term as well as the longer-term outlook and implications of these tensions.

The BoJ’s ad-hoc meeting to support SMEs and JPY cross-border flows: The MUFG Global Markets Podcast

On May 22, the BoJ held an ad-hoc monetary policy meeting and announced measures to support SMEs. Even away from that positive momentum is building toward re-starting economic activity, including  lifting Japan’s state of emergency declaration. Meanwhile, concerns simmer about the coronavirus re-conflagrating. Positive market expectations in the wake of government and central bank policy responses around the world have been bolstering risk sentiment and supporting higher global equity prices even as global bond prices have risen.
 
How will this affect cross border flows and financial markets?
 
In this episode Takahiro Sekido, Chief Japan Strategist of Global Markets Research, MUFG Bank Tokyo discusses the BoJ’s May ad-hoc meeting, risk appetite among Japanese investors, cross border flows and his view on the Yen, JPY rates and USDJPY basis.

A turning point for the euro or just another false dawn? The Global Markets FX Week Ahead Podcast

This week on the podcast, currency analyst Lee Hardman explains why the markets are optimistic and seemingly, in risk-seeking mode.
Europe is seeing eased lockdowns, improving economic indicators and the Franco-German recovery fund proposal pick up steam, prompting the question: is the euro finally at a turning point, or is it just another false dawn? 

Powell says this, Mnuchin says that. Does historic monetary and fiscal stimulus continue? The MUFG Global Markets Podcast

The collective responses from the U.S. government and Federal Reserve Bank to the COVID-19 pandemic have been nothing short of historic. But the shared approach is now showing signs of fray.... Is this a false start, or is the balance between monetary and fiscal easing about to change?
MUFG U.S. Rates Strategist, John Herrmann, picks up where we left off with last week's episode on prospective additional fiscal stimulus. Tune in to this episode for John's analysis of Fed Chair Powell and Treasury Secretary Mnuchin's remarks from earlier this week, as well as an outlook for the U.S. economy and the investment implications of the various ways that this is all playing out.

Japan’s 2nd round of fiscal stimulus and cross-border flows: The MUFG Global Markets Podcast

The State of Emergency was lifted for 39 of 47 prefectures in Japan last Thursday, May 14. Japanese companies are restarting business, but there is significant concern that coronavirus cases will start to rise again. As if all that wasn't enough, amidst this fluid situation Japanese companies are currently releasing fiscal year 2019 earnings.
In this episode MUFG’s Takahiro Sekido, Chief Japan Strategist of Global Markets Research, discusses Japanese Prime Minister Abe’s 2nd fiscal stimulus package, risk appetite among Japanese investors, cross border flows and his view on the Yen, JPY rates and USDJPY basis.

Doom and gloom for GBP: The Global Markets FX Week Ahead Podcast

A negative rates shift from the Bank of England, the UK Government's handling of COVID-19, Brexit negotiations stalling, and a dreary economic outlook are all factors causing downside pressures to GBP, according to Derek Halpenny, Head of Research for Global Markets.
Listen below to hear Derek’s outlook for the GBP, USD, and his unusual trade idea.

The MUFG Global Markets Podcast – HEROES act, but what ultimately gets done?

The U.S. government only recently unleashed historic fiscal stimulus to address the COVID-19 pandemic, yet discussions are already turning toward another round of stimulus. With form, timing and ultimate passage unclear, what is an investor to do?
In this episode Jesse Wheeler, of MUFG's Washington DC Representative Office, reviews where discussions of additional stimulus currently stand. He also explores Democratic, Republican and White House priorities and shares what we can expect to be in the ultimate legislation.

Abenomics, BoJ & COVID-19 - The MUFG Global Markets Podcast

Prime Minister Abe has extended the State of Emergency in Japan to the end of May. The Diet passed a fiscal supplementary budget for FY20 on April 30. What is the impact of fiscal and monetary policy to address the economic fall-out from the coronavirus pandemic, including cash pay-outs to residents?
In this episode, MUFG Chief Japan Strategist, Takahiro Sekido, reviews adjustments to Abenomics and Bank of Japan monetary policy amidst the COVID-19 uncertainty. He also explores triggers for the Yen, USDJPY cross currency basis and JPY rates in Q2 2020.

Weighing up the risks to the UK economy & GBP: The Global Markets FX Week Ahead Podcast

While many have speculated that the COVID-19 crisis could cause the UK's largest recession for 300 years, the Bank of England is optimistic that the repercussions will leave limited scarring in the long-term. Risks though are tilted firmly to the downside for the UK economy.
Lee Hardman, currency analyst at MUFG considers whether a lack of progress in Brexit trade talks could trigger a weaker pound in this week's podcast
Thoughts on the latest BoE policy update?
The government’s plans and the outlook for the UK economy?
How are things progressing on the Brexit negotiations front?

Historically sharp job loss to be unusually short? ... or did Chair Powell hint payrolls will be down 30 million? The MUFG Global Markets Podcast

March payrolls were bad, but April payrolls will be worse. How does the rest of the U.S. April employment report shake out? The massive government stimulus should help reverse these declines. The question is how much— and for how long. 
In this episode, MUFG U.S. Rates Strategist, John Herrmann, previews the May employment report, explores implications of the U.S. government’s paycheck protection program, and discusses his medium term forecast for the U.S. labor market and broader economy.

The COVID-19 blame game: The Global Markets FX Week Ahead Podcast

With U.S. elections around the corner, President Trump has not held back his thoughts on China's management of the COVID-19 pandemic which may result in further trade war tensions. Investors are understandably concerned, but will Trump follow through?
In Europe, all eyes are on lockdown reversal plans and any moves by the Bank of England ahead of Thursday's meeting.
Listen to this week's podcast for insight on the current state of the markets from Derek Halpenny, Head of Research for Global Markets EMEA.