The MUFG Global Markets Podcast

Fears of fallout contagion from the Ukraine crisis grip the FX market: The Global Markets FX Week Ahead Podcast

There are growing signs in the financial markets that the fallout from sanctions on Russia following its invasion of Ukraine is spreading, with Europe in particular beginning to show contagion. It has created a more uncertain backdrop for the ECB ahead of next week’s policy meeting.
Lee Hardman, Currency Analyst, and Michael Owen, MUFG’s Head of Global Client Desk for EMEA in London, discuss the implications for the FX market and what to expect from the ECB’s policy update.
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Marching towards demand destruction in global commodity markets: The MUFG Global Markets Podcast

The vertiginous surge in global commodities has surpassed even our above consensus expectations that we laid out in our annual 2022 outlook. The rally will stoke a torrent of inflationary pressures as the building blocks of the global economy gets ever more costly.
Ehsan Khoman, Head of Emerging Markets Research (EMEA), believes that commodities are now marching to levels where demand destruction – through still higher prices – will become prevalent.
Critically, he notes that the supply scarcity narrative being played out in commodities predates the geopolitics of the day – the Russia-Ukraine conflict – is merely turbo-charging today’s extreme supply shortages.
Listen in to this week’s podcast to hear why he believes demand destruction is now the only practical mechanism to rebalance exceptionally tight commodity markets.
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Bond market reactions to geopolitical risks: The MUFG Global Markets Podcast

In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves discuss the recently produced report on geopolitical analysis and historical experience of markets and the Fed during prior events. George emphasizes that it's early days to draw any strong conclusions, but he is comfortable with his views that it all comes down to how financial conditions evolve ahead.
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The invasion of Ukraine’s implications for JPY-denominated assets: The MUFG Global Markets Podcast

Ukraine is in chaos following the invasion by Russia. The Nikkei Average has responded by weakening, but USDJPY and JPY rates have not fallen markedly, staying level at around 115 and 0.20% respectively. In contrast JPY basis widened significantly. Expelling Russia from the SWIFT system has increased USD asset funding costs for Japanese investors.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido dissects market uncertainties caused by the Ukraine invasion and discusses JPY cross-asset pricing and JPY cross-asset flow from the January JSDA data. He also shares his views on Dollar/Yen, Yen rates, and Yen basis.
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Ukraine, Russia and FX market impact: The Global Markets FX Week Ahead Podcast

The Russian invasion of Ukraine has so far had a brief and relatively muted impact on FX in the G10 space, with the initial risk-off reaction yesterday reversing quickly. Why is this? Derek Halpenny, Head of Research for Global Markets EMEA and International Securities, talks to Michael Owen, Head of Global Client Desk, EMEA about the FX reaction to the Russia-Ukraine conflict and how the markets might play out going forward.
Derek expects greater focus on inflation and central bank action next week given Fed Chair Powell will present the semi-annual testimony to Congress.
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How much will European gas markets be impacted from the Russia-Ukraine crisis? The MUFG Global Markets Podcast

The alarming Russia-Ukraine crisis has raised the spectre of a worst case scenario for European gas prices, at a time when inflation is already elevated and financial conditions are tightening.
Ehsan Khoman, Head of Emerging Markets Research (EMEA), believes that the markets concern is beginning to pivot for investors pricing in geopolitical risk premium to now a heightened chance that markets and European authorities have to contend with physical delivery risks. Ehsan believes that this signals significantly higher (and more) volatile gas (and utility) prices until price-induced demand destruction becomes prevalent.
Listen in to this week’s podcast as he delves more into how the European gas supply could be impacted by the geopolitical crisis unravelling in Ukraine and what could come next.
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Geopolitical risks main drivers of FX market: The Global Markets FX Week Ahead Podcast

The risk of renewed conflict between the Ukraine and Russia has contributed to more volatility in FX markets over the past week. The shift in focus has temporarily taken the spotlight away from expectations for central policies - but for how long?
Lee Hardman, Currency Analyst, discusses what these geopolitical risks could mean for FX market performance going forward with Simon Mayes, Director of MUFG’s Global Customer Marketing Group for EMEA, in London.
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Energy crunch, elusive geopolitics and elevated inflation: The MUFG Global Markets Podcast

With inflation currently at multi-decade highs and uncertainty surrounding the inflation outlook already unprecedented, the last thing the recovering global economy needs is another leg higher in energy prices. Yet that is what it is getting.
A confluence of elusive geopolitics surrounding both the Russia-Ukraine crisis and Iranian nuclear negotiations, in conjunction with the extreme shortage of oil and gas supplies, are rattling global markets.
Ehsan Khoman, Head of Emerging Markets Research (EMEA), takes stock of developments and offers his perspective as to why further rises in salient energy prices could fuel inflation expectations and wage pressures, with oil – and the broader bull commodities market – contributing to significant monetary tightening over the next 24 months.
 
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Broader U.S. fixed income still in the cross hairs: The MUFG Global Markets Podcast

In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves discusses the implications of the break above 2% on the 10-year Treasury and how sustainable is the move in the near-term versus longer-run for the U.S. markets and the economy. He also discusses how U.S. credit is in the cross hairs of higher rates and risk market volatility.
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Nuances of BoJ fixed rate buying operations and cross-border securities flows: The MUFG Global Markets Podcast

JGB rates rose last week, and the Bank of Japan offered fixed-rate JGB buying operations on February 14. USDJPY downside has been firm, and JPY basis returned to its previous level after first widening. The Nikkei Average has been soft, reflecting the slump in U.S. stock prices. The firmness of USDJPY downside and USDJPY basis volatility have been impressive. Looking ahead, we expect the BoJ yield curve control operations and cross-border investment flows to be the driver of JPY asset price action.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido discusses the nuances of the BoJ’s fixed rate buying operation as well as the attributes of securities investing flows from last week’s Balance of Payment data. He also shares his views on the Dollar/Yen, Yen rates, and Yen basis.
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