The MUFG Global Markets Podcast

Will the USD strengthen further on the back of US exceptionalism?

Lee Hardman, Senior Currency Analyst, and Reza Nasehi, Vice President of the Japanese Client Sales Group for EMEA in London, discuss what has triggered a more volatile USD this week. Will renewed US regional banking concerns threaten to derail the USD’s rebound? 
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January FOMC Preview: The MUFG Global Markets Podcast

This week George Goncalves, MUFG Head of U.S. Macro Strategy, reviews the key developments in the market as January comes to a close and February begins. We provide our view on the latest changes in government financing estimates and the upcoming jobs report. George walks us through the team’s FOMC preview for the January meeting where we believe that after the December pivot, they are sequencing toward starting an easing cycle soon, in our view.

Event risk ahead - FX volatility set to pick up

Derek Halpenny. Head of Research, Global Markets EMEA & International Securities talks to Michael Owen, Head of Global Client Desk EMEA, about the implications of the FOMC meeting and the US jobs report for the US dollar next week and beyond.
Derek also discusses the potential pound impact from the Bank of England meeting and why MUFG Research are highlighting the potential for EUR/GBP to continue breaking lower.
 
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Will the USD’s strong start to the year continue?

Lee Hardman, Senior Currency Analyst, and Simon Mayes, Head of UK, Ireland and Switzerland, Corporate Sales (FX) in London, discuss what have been the main drivers behind the US dollar’s rebound at the start of this year.
They also discuss the latest policy meetings from the BoJ and ECB in the week ahead.     
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What has been driving the FX market at the start of 2024?

Lee Hardman, Senior Currency Analyst, and Seiko Kataoka-Fisher, Vice President from Japanese Customer Sales for EMEA in London, discuss the key drivers of FX market performance so far this year.
Will market expectations for earlier and deeper major central bank rate cuts be met?
 
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2024 Desk Strategy Outlook: Credit Market Views: The MUFG Global Markets Podcast

George Goncalves, MUFG Head of Macro Strategy, discusses the 2024 outlook for U.S. credit markets with IG Desk Analyst Andrew Myers and HY Desk Analyst Bill Matthews. They cover topics from the recently published 2024 Desk Strategy Outlook, ranging from corporate bond issuance, key credit themes to watch ahead, and potential credit spread ranges. 

2024 Desk Strategy Outlook: Agency MBS Views: The MUFG Global Markets Podcast

George Goncalves, MUFG Head of U.S. Macro Strategy, discusses the 2024 outlook for the agency MBS sector with Glenn Schultz, MUFG Head of Prepayment Modeling and Strategy and our resident subject matter expert on mortgages. They cover topics from the recently published 2024 Desk Strategy Outlook, ranging from agency MBS issuance, prepayments, and the mortgage basis. They also discuss if "the second golden age of MBS" is still a relevant theme for investors and the agency MBS market. 

2024 Outlook Series: Exploring the Macro Economy and Fed View Ahead: The MUFG Global Markets Podcast

This week George Goncalves, MUFG Head of U.S. Macro Strategy, discusses our Macro thesis around the economy and Fed policy. With unemployment low, inflation declining, and spending solid (helped by fiscal policy mid-year), all this resulted in stronger than expected GDP in 2023. The markets also embraced the soft landing narrative in the last two months of 2023. In George’s view, this makes for a hard comparison at the start of 2024. In our view, the long and variable lags from one of the fastest Fed hiking cycle catches up in 2024. This will put the riskier side of the credit spectrum in scope for further adjustment. Net, we are not calling for a hard landing recession but instead something more like a bumpy landing which is short-lived. In fact, a recession altogether could be avoided if the Fed meets or beats what is priced-in for cuts and bank lending rebounds. Yet, due to lags in the recession dating process, we won’t know we’re in one until after the fact. In the end, we stick by our view that the Fed will be starting an easing cycle soon (our base-case is for a 25bp March cut) where they will attempt to soften the decline in economic activity as the year progresses.

US jobs impact on the US dollar and MUFG’s 2024 FX views

The first week of 2024 is coming to an end and following the release of the US employment report, Derek Halpenny, Head of Research Global Markets EMEA & International Securities talks to Michael Owen, Head of Global Client Desk about the impact of the jobs data on the financial markets and why the data is not as strong as it first looked. Derek also outlines MUFG’s Themes of the Year pieces in the January FX Outlook publication and explains the MUFG US dollar view for 2024.
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Falling inflation remains an important driver for the FX market ahead of the Christmas holidays

Lee Hardman, Senior Currency Analyst, discusses the impact on the FX market from building evidence of slowing inflation in the UK & US. How does the BoJ’s reluctance to signal a shift away from negative rates alter the outlook for the yen?

USD hit hard after Fed opens door to rate cuts. Will the USD sell-off be sustained?

Lee Hardman, Senior Currency Analyst, and Reza Nasehi, Vice President of the Japanese Client Sales Group for EMEA in London, discuss the FX market implications from this week’s major central bank policy updates.
While the Fed opened the door to rate cuts, will the BoJ prepare the ground for a rate hike in the week ahead?
 
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December FOMC & 2024 Outlook Preview: The MUFG Global Markets Podcast

This week George Goncalves, MUFG Head of U.S. Macro Strategy, marks to market the price-action since our last podcast in late November as well as how markets are setup ahead of a key week for central banks. With markets getting ready to closing out another year, how the FOMC event is received will likely set the stage if the risk-on continues into year-end or not. We expect the Fed to push-back on the recent easing of financial conditions and avoid saying anything that might come across as under-writing rate cuts, something that the market is pricing in spades for 2024. With a recent goldilocks jobs report and a slightly higher than expected CPI print, especially with a higher super-core reading (one of chair Powell’s preferred inflation metrics), we do not believe that the Fed will convey a dovish message at the last FOMC meeting of 2023. Lastly, George gives us a glimpse into the themes and framework the team is using in order to setup for the 2024 macro world.

JPY surges – what lies ahead for USD/JPY?

The yen surged this week and Derek Halpenny, Head of Research, Global Markets EMEA & International Securities talks about the yen move, whether the BoJ will hike rates this month and what lies ahead for the yen.
Derek also discusses the heavy schedule of central bank meetings next week, including the Fed and the ECB and what this means for G10 currencies.
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Will the USD sell off extend further?

Lee Hardman, Senior Currency Analyst, and Seiko Kataoka-Fisher, Vice President from Japanese Customer Sales for EMEA in London, discuss the FX market implications from the ongoing dovish repricing of central policy expectations. Will the USD sell off extend further in the week ahead?  
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The US dollar weaker across all G10 currencies once again

Derek Halpenny, Head of Research Global Markets EMEA & International Securities, talks to Shan Husain, Vice President - Institutional Investors FX Sales EMEA, about the factors behind why the euro has underperformed this week – it was the second worst performing G10 currency this week. Derek also looks to next week with the RBNZ meeting, data from the US and updates on trade views.
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U.S. Markets, is risk-on whistling past the bond-yard?: The MUFG Global Markets Podcast

This week George Goncalves, MUFG Head of U.S. Macro Strategy, walks us through some of his latest special topics in the Macro2Markets Monthly Outlook report. As the title suggests, we first explore the risk-on mood on Wall Street and what is driving it. In George’s view, he believes it is a bit premature that some market participants are reading the weaker data and the market-based interest rate declines as a good thing. George wraps up by providing his views on the current developments in bank lending and general credit conditions overall. He also takes us through the big moves that are happening on the U.S. government deficit front and their implications.
 

FX market fallout from slowing inflation

Lee Hardman, 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 further evidence of slowing inflation in the UK and US. Has the tide turned against the US dollar?
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FX consolidation ahead of key inflation data

The US dollar has recovered some of last week’s losses and Derek Halpenny, Head of Research Global Markets Research & International Securities talks to Michael Owen Head of Global Client Desk EMEA about what helped prompt a recovery of the US dollar this week.
With no single clear driver of FX and rates this week, Derek looks ahead to next week and the key inflation data from the US and employment and inflation data from the UK. Derek also provides an update on Global Market Research’s trade views.
 
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The MUFG Global Markets Podcast: 2023’s never ending conga line of black swan events

In today's episode, George Goncalves, MUFG Head of U.S. Macro Strategy, and Glenn Schultz, MUFG Head of Prepayment Modeling and Strategy, discuss October's remittance data, relative value against the backdrop of slower seasonal prepayment, and the outlook for the current coupon basis against the headwinds of 2023's never ending conga line of black swan events. 

Is the peak now in place for the USD and US yields?

Lee Hardman, Senior Currency Analyst, and Jack Greenslade from the Global Customer Marketing Group, discuss the main drivers behind the sharp adjustment lower for the USD and US yields over the past week.
Have we now passed the peak of US exceptionalism priced into FX markets?  
 
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Quick FOMC preview as the BoJ and Q.R.A. take the spotlight: The MUFG Global Markets Podcast

This week George Goncalves, MUFG Head of U.S. Macro Strategy, takes us around the world and back, discussing the latest changes from the Bank of Japan (BoJ), ahead of October month-end trading and the critical double-header events on November 1, when the Treasury releases its quarterly refunding announcement (Q.R.A.) for its Treasury supply needs. Then in the afternoon, the FOMC meets for its second to last meeting of calendar year 2023.
In George’s view, so long as term premia stays elevated and 10yr rates do not decline back towards the low 4s, these higher long-term rates are doing the tightening for the Fed, and thus the Fed hiking cycle is likely over (where the July hike may end up being the last hike of this cycle). In addition, what is frightening about October 31, other than the spooky Halloween scenes, is that this means there are only two months left in the year and liquidity probably gets worse for markets from here on out. Lastly, George wraps up by providing his views for Fed day, expecting another “hawkish skip”, the second in a row, and that chair Powell will refrain from saying they are done by keeping December in play.

FX vol could spike with busy week ahead

Swings in the 10yr UST bond yield reverberated into the FX markets this week with the EUR/USD intra-day high-low weekly range the widest since mid-July. Derek Halpenny, Head of Research, Global Markets EMEA & International Securities, talks to Simon Mayes, Head of UK, Ireland and Swiss Corporate Sales, about the continued resilience of EUR/USD and what might be behind it. Derek also looks ahead to next week with the BoJ, FOMC and BoE all meeting and explains why the BoJ needs closest watching after USD/JPY broke higher through 150 this week.
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New highs for US yields but not the USD

Lee Hardman, Senior Currency Analyst, and Andrea Hayward, Vice President of the Japanese Client Sales Group for EMEA in London, discuss how rising Middle East tensions and higher US yields are impacting the FX market. Will the upcoming BoC and ECB policy meetings prove to be market-moving in the week ahead?

The State of Housing Edition: The MUFG Global Markets Podcast

This week in a special edition podcast episode, George Goncalves, MUFG Head of U.S. Macro Strategy, is joined by Glenn Schultz, MUFG Head of Prepayment Modeling and Strategy, to go over a recently published and comprehensive Desk Strategy Report called “The State of Housing” where they explore the impact of high mortgage rates and affordability issues that are impacting the U.S., as well as the potential lasting effect on housing and mortgage macro fundamentals ahead.
George walks through how these higher rates are unsustainable for a viable housing and mortgage financing market and unless incomes were to rise, and rise at a much faster rate, that something has to give (either house prices decline, and/or rates decline). Glenn threads in the implications to MBS issuance, CPRs, and how the market might be the most negative convexity it has been given the larger loan balances. George wraps things up by discussing how this might influence the Fed rate views and their MBS portfolio.