The MUFG Global Markets Podcast

Winter prepayment, issuance outlook, and the search for convexity: The MUFG Global Markets Podcast

In today’s episode, MUFG Head of Prepayment Modeling and Strategy Glenn Schultz discusses the October remittance data and outlines our views with respect to winter seasonal turnover prepayment, 2023 issuance, and investors’ search for convexity in the agency MBS. He also discusses the use of machine learning to identify unique convexity profiles, and how investors may leverage machine learning to create excess risk adjusted returns in the agency MBS market.
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Why did Japan’s monetary base expand only slightly despite record currency intervention and continued JGB purchases by the Bank of Japan?: The MUFG Global Markets Podcast

USDJPY has come off the highs as of late. Freight shipping rates and resource prices have started to slip ahead of Thanksgiving, and tight logistics conditions are loosening somewhat despite the persisting stresses of the war in Ukraine. At the same time market pricing has begun to shift and speculation that BoJ Governor Kuroda may change his policy stance has increased.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido discusses the impact of the MoF’s currency intervention and BoJ monetary operations on the flow of money, as well as what to watch with regards to monetary and fiscal policy. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
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Hopes for policy pivots in the US & China add to FX volatility: The Global Markets FX Week Ahead Podcast

Lee Hardman, Senior Currency Analyst, and Reza Nasehi, Vice President of the Japanese Client Sales Group for EMEA in London, discuss the impact on the FX market from the Fed’s latest policy update, and building optimism over a shift away from the zero-COVID strategy in China.
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Key considerations to watch out for at COP27: The MUFG Global Markets Podcast

COP27, which takes place in Egypt from 8-16 November, will be crucial to keeping government action in check and the Paris Agreement goals alive.
Ehsan Khoman, Head of Commodities, ESG and Emerging Markets Research (EMEA) contextualises what markets can expect from COP27, which comes at a critical time after the seismic events of 2022 – the war in Ukraine, the global energy crunch and the cost-of-living crisis. Key items Ehsan is watching focus on whether countries will strengthen climate targets and policies, raise climate funding for emerging markets and demonstrate steadfastness in turning aspirations of climate targets into action.
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Japanese life insurance company investment plans and the outlook for Samurai bond issuance following the BoJ’s decision to continue easy monetary policy: The MUFG Global Markets Podcast

USDJPY is off the highs as the Dollar gives back a portion of recent gains. JGB yields reflect the strength of the Bank of Japan’s yield control operations as an increase in buybacks last week helped the super long sector recover. USDJPY basis has tightened on both strong demand for JGBs from foreigner investors and Japanese investor selling of foreign bonds. Amidst the market volatility in G10 rate markets and the October BoJ meeting non-event, we expect the Tokyo market to reflect a mixture of JGB flows among Japanese and foreign investors, foreign companies’ JPY Samurai bond issuance, and Japanese companies’ overseas investing activities.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido dissects H2 FY22 Japanese life insurance company investment plans, discusses the Samurai bond market, and summarizes high points from the BoJ’s October policy meeting. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
 

November FOMC Preview – Team pivot to get let down again: The MUFG Global Markets Podcast

MUFG Head of U.S. Macro Strategy George Goncalves provides an update on the bullish risk market price action and thinks too much good news around a potential Fed pivot is already priced-in. George provides his base case FOMC meeting views and provides both dovish and hawkish scenario outcomes. Bottom line, we expect team pivot (those expecting Fed to transition policy) will be let down again as the Fed is committed to getting inflation under control. 
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USD in focus as central banks meetings loom: The Global Markets FX Week Ahead Podcast

After another weak of US dollar depreciation, Derek Halpenny, Head of Research Global Markets EMEA and International Securities, discusses with Julie Ellert, Head of Frabelux Corporate Sales, Paris branch, whether this US dollar sell-off will be sustained into next week.
It’s a big week for the US dollar and the broader financial markets - the FOMC meeting on Wednesday is set to dictate whether the negative US dollar sentiment will persist or not.
Derek also discusses what the central bank meetings this week mean for the FX markets, in particular how the Bank of England meeting next week will impact the pound.
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Contextualising the IMFs fiscal assessment for global markets: The MUFG Global Markets Podcast

The IMF’s semi-annual Fiscal Monitor report recently published – arguably the most comprehensive source of standardised global fiscal data available – accentuates how fiscal policy can protect emerging market economies against the cost-of-living crisis, while concurrently preserving medium-term sustainability of public finances.
Ehsan Khoman, Head of Commodities, ESG and Emerging Markets Research (EMEA) discusses the IMF’s key conclusions and offers insights into why he believes the next major imbalance to materialise across the emerging markets complex will be public finances. Ehsan believes that those comprising large fiscal deficits, public debt levels and weaker balance sheets will be key differentiating factor for markets to cogitate in the months ahead.
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Bearish exhaustion driving risk markets too far?: The MUFG Global Markets Podcast

In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves discusses how the developments in the bond markets have been more logical lately, especially around key macro events. Whereas risk assets, like the performance of equities, have been more perplexing. George attributes the multiple bounces higher for stocks over the last month as a function of “bearish exhaustion” as investors try to determine if a solid bottom has been put in for 2022. George believes that broader markets are perhaps confusing a potential Fed pause as a pivot, and even then it’s still too early for the Fed to be signaling a transition in policy given how high inflation remains.
George gave us a glimpse of some of the risk factors into the end of 2022. He is most worried about liquidity risk after one of the worst bond market performances in history. Meanwhile, what has been happening in the FX markets suggest that dollar liquidity and access could be an issue into year-end. For now, we need to get through the next Fed meeting and the mid-term elections before we can have a better outlook on how this year may end.
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Foreigners challenge BoJ yield curve control once again but Japanese investors have the BoJ’s back: The MUFG Global Markets Podcast

Currency intervention capped USDJPY at the 152-mark, but Yen selling flows dominate, and the uptrend for USDJPY has not been thrown off course. Upward stresses on JPY rates are deep-rooted, but the BoJ has been able to cap rates with its yield control operations. JPY bond arbitrage trading flows by foreigners and Japanese investors’ selling of foreign bonds have caused the belly of the JPY basis curve to tighten, but the front end has been dominated by Japanese investors’ funding of USD assets over year-end.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido updates us on the cross asset flows during the month of September and also previews the October BoJ policy meeting. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
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