The MUFG Global Markets Podcast

Safe-haven currencies supported by hawkish Fed rhetoric: The Global Markets FX Week Ahead Podcast

Lee Hardman, Senior Currency Analyst, and Seiko Kataoka-Fisher, Vice President of Japanese Customer Sales for EMEA in London, discuss the fallout for the FX market from Fed Chair Powell’s semi-annual testimony and fresh concerns over the health of US regional banks.
They also discuss whether the Fed will step up the pace of hikes later this month?
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Commodities remain wedged between bearish macro and bullish micro: The MUFG Global Markets Podcast

Notwithstanding China’s early reopening and a brighter global outlook than at the beginning of the year, US and European inflation have remained stickier than expected, raising expectations of further rate hikes and supressing broad commodity returns in recent weeks.
However, Ehsan Khoman, Head of Commodities, ESG and Emerging Markets Research (EMEA), believes that the bullish micro fundamental story is still very much intact, with inventory levels at depressed levels and spare production capacity running thin. He believes that with global demand still improving, most commodity markets will likely remain in backwardation, exposing physical tightness and structural underinvestment. This will provide an organic lift in prices as soon as the bearish macro moves into the rear-view mirror.
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Kuroda’s last policy meeting is likely a non-event, but what if it isn’t? The MUFG Global Markets Podcast

USDJPY has stopped rising while 10-year JGB yields remain stuck at 0.50%. The Nikkei Average is up and risk sentiment is positive. Japanese investors have been rebuilding their foreign bond positions ahead of the end of fiscal year 2022. Japanese investors’ foreign bond flows are stronger than JPY bond flows among foreigners.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido previews the March Bank of Japan Monetary Policy Board meeting and shares his outlook for JPY rates in March. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
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Event Risks Lie Ahead: The Global Markets FX Week Ahead Podcast

After a choppy and largely directionless week in the FX markets, Derek Halpenny, Head of Research Global Markets EMEA and International Securities talks to Jack Greenslade, Associate in the Global Markets Sales Division, about the conflicting macro forces that have kept the US dollar in check. They also look ahead to next week and beyond to assess the potential direction of the dollar, as well as the possible impact of the National People's Congress on Sunday, Jay Powell's semi-annual testimony on Tuesday and Governor Kuroda's last monetary policy meeting next Friday.
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Key takeaways from International Energy Week 2023: The Global Markets Podcast

International Energy Week – the global conference focused on transitioning out of the geopolitical and environmental crises facing energy – took place this week in London, bringing together more than 1,000 delegates from across the energy industry, investors, policymakers, academic and NGOs.
Ehsan Khoman, Head of Commodities, ESG and Emerging Markets Research (EMEA), contextualises the takeaways from the conference within the central commonality surrounding energy affordability, security and sustainability – reinforcing the themes of MUFG’s ESG 2023 outlook report (see here).
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What does an Ueda-led Bank of Japan mean for Japanese financial markets? The MUFG Global Markets Podcast

The spotlight has been on the vetting process for the Bank of Japan leadership nominees in the Diet since last Friday. The process has been smooth so far, and USDJPY has not been volatile but outgoing BoJ Governor Haruhiko Kuroda could still spring a surprise at his last Monetary Policy Board meeting in March.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido shares his impressions of the BoJ leadership nominee hearings and considers the implications for JPY basis and JPY rates. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
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How have Fed and BoJ policy expectations helped to lift USD/JPY? The Global Markets FX Week Ahead Podcast

Stronger activity data and firm inflation data is triggering a hawkish repricing in global rate markets. Lee Hardman, Senior Currency Analyst, and Simon Mayes, Head of UK, Ireland and Swiss Corporate Sales, discuss whether the USD will continue to rebound alongside rising US yields. Did incoming BoJ Governor Ueda open the door for further USD/JPY upside?
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The return of a key driver of USD strength? The Global Markets FX Week Ahead Podcast

This week was the third consecutive week of strength for the US dollar (DXY basis) and Derek Halpenny, Head of Research Global Markets EMEA and International Securities, talks to Shan Husain, Vice President FI FX Sales, about the drivers of the FX move including the US CPI and other data this week and the continued hawkish rhetoric from Fed officials.
Derek also looks ahead and assesses the FX outlook, including the pound after the UK CPI data.
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Contextualising the European response to the US IRA: The MUFG Global Markets Podcast

The European Commission recently unveiled its plan to address the fallout from the US’s Inflation Reduction Act (IRA) – the transformational USD369bn package of climate and energy spending. There has been a significant debate across the EU about the implications for European firms in terms of competitiveness and level playing field.
Ehsan Khoman, Head of Commodities, ESG and Emerging Markets Research (EMEA), believes that this could kickstart major EU/US cooperation, and launch a form of “Atlantic IRA” – given the EU aim to collaborate on its plan with the US (rather than working against it). According to Ehsan, the effect of policy will be to attract private capital and accelerate a clean energy capex supercycle this decade with rising investments in renewables and power grids across the EU and US.
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Markets are realizing that it’s too soon to claim victory on inflation: The MUFG Global Markets Podcast

George Goncalves, MUFG Head of U.S. Macro Strategy, walks us through the worse than expected January CPI inflation report and the market’s reaction. In general, we view the repricing of rates as appropriate but continue to be perplexed on the easing that remains for broader financial conditions. With the month at the half-way point, and overall economic data painting a picture that inflationary pressures still linger, the upcoming FOMC minutes from the January meeting might shed light on what the committee is thinking. Net as we have said before, it’s not about what level the Fed gets to, but what are the conditions needed for them to stop hiking altogether.
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