The MUFG Global Markets Podcast

Contextualising the EU’s latest natural gas market management directives: The MUFG Global Markets Podcast

The European Union has announced a new emergency package to tackle the energy crisis, betting on steps to bolster solidarity among member states. Yet, the bloc is refraining from immediate gas price caps to stem high inflation and stave off recession, amid a lack of unanimity in the European Council and considerable technical complexities.
Ehsan Khoman, Head of Commodities, ESG and Emerging Markets Research (EMEA), discusses the latest proposals in depth and offers insights into the continent’s dynamic system of cross-border gas network, the practicalities of which have never been tested before.

The Second Golden Age of Mortgage Backed Securities: The MUFG Global Markets Podcast

In this episode, MUFG Head of Prepayment Modeling and Strategy Glenn Schultz discusses the October remittance data and outlines our thesis of the ‘Second Golden Age of Mortgage Backed Securities.' He reviews how the evolution of the coupon stack, borrower and loan characteristic diversity, and the normalization of interest rates converge to bring about the dawn of a second golden age for mortgages. 
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Structural changes in GBP, bond market stresses, and Japanese securities investing flows: The MUFG Global Markets Podcast

The upward trajectory of Dollar/Yen is driving cross-currency basis wider. Yen rate has been relatively stable thus far, which stands in stark contrast to GBP and other G10 bond markets. How the Bank of Japan’s yield control policy withstands stresses in Gilt and other global bond markets remains an open question.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido reviews cross-border securities flows during the volatile price action that occurred during the months of August and September, as well as additional insights from the quarterly Tankan survey. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
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Markets get choppier as UK makes policy U-turn: The Global Markets FX Week Ahead Podcast

A major policy U-turn is underway in the UK and levels of volatility are high as the week ends. Derek Halpenny, Head of Research Global Markets EMEA and International Securities, outlines to Matthew Carvell, Director of Spot FX Trading at MUFG, what this might mean for the UK markets and GBP. Has Liz Truss done enough to restore confidence and is Jeremy Hunt a wise choice as Chancellor? Derek also discusses the US CPI print and what the data means for the FOMC and the US dollar.
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Caps, crisis, cliff-hangers – navigating what comes next in EU energy: The MUFG Global Markets Podcast

European countries are still scrambling for common solution to the energy crisis. Even though the recent fall of gas and electricity prices, as well as gas storage fill levels being well above 90%, is offering comfort for navigating the looming winter ahead, European policymakers are still scrambling for a more permanent common solution to the energy crisis.
Ehsan Khoman, Head of Commodities, ESG and Emerging Markets Research (EMEA) believes that the winter energy risks are pivoting from a continental gas emergency towards national, controlled and transient electricity cuts (known as load shedding) as now the central threat, especially in the event of colder-than-normal temperatures.
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CPI Shocktober to drive markets to new local price lows?: The MUFG Global Markets Podcast

In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves marks to market what he believes was another head-fake move at the start of Q4 trading. The roundtrip price action that we have seen in the last week or so of trading in both bonds and stocks – which saw massive rallies unwind into this new trading week – reminds us that many investors are still enamored with the buy-the-dip approach versus selling-the-rips stance that we have been advocating for a while, which are more common trading strategies in bear markets. We go into what to expect from the FOMC minutes and the upcoming inflation reports. Given the consistency of Fed speakers of late, we would be shocked if they signal anything specific to what would get them to pivot before seeing inflation clearly heading lower. Economists expect another elevated inflation reading and even if it comes in weaker, we do not believe one data print or two would get the Fed to deviate from its hawkish goal of front-loading as many hikes as possible in 2022. Whereas a high CPI print runs the risk of shocking us into a bigger risk-off. That would be an issue as markets are on their backfoot and hugging multi-week trend supports, especially in stocks, but even bonds are at risk of a push to 4% across all curve points.
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Too soon to expect a weaker USD on the back of a dovish Fed policy pivot? The Global Markets FX Week Ahead Podcast

It has been another volatile week in the FX market as the USD and US yields have corrected lower. Lee Hardman, Senior Currency Analyst, and Simon Mayes, Director of MUFG’s Global Customer Marketing Group for EMEA in London, discuss whether it is too soon to expect a dovish Fed policy pivot and sustained reversal of USD strength.
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Casualties of Tightening (The Historic Rise in Global Central Bank Policy Rates): The MUFG Global Markets Podcast

In today’s episode, Hailey Orr, MUFG Capital Markets Strategist, discusses her team’s most recent publication: Casualties of Tightening (The Historic Rise in Global Central Bank Policy Rates). Hailey speaks to the idea of “synchronicity”, where she takes us through the remarkable YTD sell-off of nearly every risk asset on the planet. She also goes over how the current global policy tightening cycle differs from past cycles and which areas in the market are bearing the brunt, and expectations for the Fed tightening cycle going forward.
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”Shock and awe” - OPEC+ strategy will lift oil prices: The MUFG Global Markets Podcast

OPEC+ announced a production cut of two million barrels per day at its meeting this week – the largest such cuts from the group since the start of the Coronavirus in early 2020. What’s unprecedented is that the group decided to take barrels off global markets amid one of the tightest oil markets on record and ahead of a potential decline in Russian exports later this year.
Ehsan Khoman, Head of Commodities, ESG and Emerging Markets Research (EMEA) believes that the group’s headline cut will result in a lower effective cut of the quantum of ~1.1m b/d due to adjustments to baseline levels of production allocated to producers. Critically, he views that the cuts will not only further tighten fundamentals – lending support to his bullish price forecasts – but also help remedy the large exodus of oil investors that has left prices underperforming both fundamentals and other cyclical asset classes.
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Fed Pivot Dreams Strike Again: The MUFG Global Markets Podcast

In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves provides us with an update on how markets got back to dreaming of Fed pivots again after such a terrible performance in September. He also walks us through some of his main themes in the latest Macro2Markets Monthly called: A sea of doom (loops) as FCI tightens further. George remains skeptical of what could be another bear market rally in the making and attributes the recent price action to positioning and sentiment having gotten too bearish-leaning. That said, George does not believe there is an imminent Fed reversal and that the Fed needs financial conditions to tighten even further in order to clamp down on aggregate demand and contain inflation into the new year. It’s also interesting to hear how George defined the criteria for what he dubs the end of the bond bull run, but that said, it doesn’t mean the start of the bear market in bonds is ahead either.
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