The MUFG Global Markets Podcast

May JPY cross asset review and June outlook, as well as a resurgent Samurai bond market: The MUFG Global Markets Podcast

JPY basis has widened while staying flat amidst a mix of buying and selling as JPY rates have stabilized and the Yen has generally weakened against USD (Monday’s price action notwithstanding). The Nikkei Average has started to tick up again slowly. Japanese investors could gradually restore their foreign bond positions as they both buy and sell during the month of June. Separately, June also brings the high season for Samurai bond issuance.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido discusses his outlook for Yen assets, analyzes BoJ operations and fiscal fund flows, and reviews the Samurai bond market. He also shares his views on the Dollar/Yen, Yen rate, and Yen basis.
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Macro Narratives in a State of Flux: From inflation to recession fears?: The MUFG Global Markets Podcast

In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves recaps his latest Macro2Markets Monthly report and goes over how macro narratives are evolving and how markets are adjusting to competing themes. George believes that rate risks are in the process of taking a back seat to coming credit concerns where the cross roads of high inflation and slowing growth may result in a challenging environment for Corporate America, especially firms dependent on low rates and fast economic activity. George views the rebound in risk assets as markets adjusting from oversold conditions, and that more downside risks remain for 2022.
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USD – Smile theory or sorry tale? The Global Markets FX Week Ahead Podcast

The US dollar depreciated again this week, with US yields declining and equity markets rebounding – always a bad mix for the dollar. Derek Halpenny, Head of Research, Global Markets EMEA and International Securities discusses the outlook for the currency with Michael Owen, MUFG’s Head of Global Client desk for EMEA in London.
Where is the US dollar on the famous USD Smile theory and will the more favourable financial market conditions persist and weaken the dollar further?
Derek also provides his view on the market impact of the UK fiscal support package announced on Thursday.
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Counting the costs and gauging the risks in Emerging Markets: The MUFG Global Markets Podcast

Extensive negative supply-side disruptions, the war in Ukraine, rising commodity prices and a less supportive global liquidity backdrop have markedly deteriorated the inflation-growth trade-off across Emerging Markets (EM).
A drawn-out inflation challenge with more rate hikes, tighter financial conditions, sharply slowing growth and higher borrowing costs leaves a perplexing outlook for EMs.
Ehsan Khoman, Head of Emerging Markets Research (EMEA), believes it is prudent to look at bottom-up narratives in gauging where the risks sit and where the opportunities remain across the EM complex.
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March U.S. TIC and April JSDA JPY bond data show Japanese investor preference for non-U.S. bonds and JGBs:The MUFG Global Markets Podcast

USDJPY and Japan stocks continue to fall, pulled down by weakness for U.S. stocks. JGB rates have not moved much under the tight control of the BoJ’s yield management, but JPY basis is still likely to widen. Japanese G10 bond flows are substantial, and Tokyo market JGB asset swap appeal could be impacted by Japanese investors trading JGBs.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido reviews developments with cross-asset JPY asset positions, as displayed in the March USTIC and J-BoP, and April JSDA data. He also shares his views on spot Dollar/Yen, Yen Rate, and Yen basis.
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As good as it gets for the USD? The Global Markets FX Week Ahead Podcast

Lee Hardman, Currency Analyst, and Matthieu Gloux, Head of MUFG’s Global Client Sales for EMEA in London, discuss the recent correction lower for the USD, and what factors could help to trigger a sustained reversal.  
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What does the emerging market inflation experience signal for developed markets? The MUFG Global Markets Podcast

Headline inflationary pressures hit key emerging markets early last year, generating hawkish monetary policy responses well ahead of developed markets. To the extent that inflationary dynamics are proving more global than anticipated, and with most key developed market central banks following emerging markets’ monetary tightening cycles with around a one-year lag, it’s possible that the evolving emerging markets inflation and rate cycles could offer valued guidance of what developed markets may experience in the coming months.
Ehsan Khoman, Head of Emerging Markets Research (EMEA), offers insights into the lessons learnt from the inflation experience in emerging markets and what this could entail for developed markets as the prospects of peak inflation moves into sight.
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Insights from cross-border flows and Japanese lifer fiscal year 2022 investment plans: The MUFG Global Markets Podcast

Japanese companies and banks have been releasing earnings results. A key point for the bank sector has been valuation losses on foreign bond holdings, while for exporters, a higher USDJPY and better terms of trade have been a boon for earnings. JPY basis has been widening as USDJPY and JPY rates have benefitted from risk aversion.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido reviews April securities investing flows and Japanese lifers’ investment strategies for the first half of fiscal year 2022. He also shares his views on spot Dollar/Yen, Yen rates, and Yen cross-currency basis.
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A turning point for the JPY as the sell-off in risk assets deepens: The Global Markets FX Week Ahead Podcast

Lee Hardman, Currency Analyst, and Simon Mayes, Director of MUFG’s Global Customer Marketing Group for EMEA in London, discuss the recent turn around for the yen, and the likelihood of EUR/USD hitting parity as it tests the lows from the start of 2017.
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Issuance, and Spreads, and the Fed, oh my...:The MUFG Global Markets Podcast

In today's episode, MUFG Head of Prepayment Modeling and Strategy Glenn Schultz reviews April’s prepayment data, issuance trends in the agency MBS market, and the Federal Reserve’s MBS portfolio run-off. He discusses how the confluence of the Federal Reserve’s interest rate policy, balance sheet run-off, and issuance and prepayment trends inform MUFG’s ‘old normal’ thesis for the agency MBS valuations and the current coupon spread.
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