The MUFG Global Markets Podcast

What has been driving the recent pick-up in FX market volatility? | The Global Markets FX Week Ahead Podcast

Lee Hardman, Senior Currency Analyst, and Abdul-Ahad Lockhart, Currency Analyst in London, discuss the main market impacts from the recent surprise announcements from the BoJ and Fitch. The USD has staged a strong rebound since the middle of last month, will it continue in the week ahead?  

What impact will the BoJ’s policy adjustment have on the FX market? | The Global Markets FX Week Ahead Podcast

Lee Hardman, Senior Currency Analyst, and Seiko Kataoka-Fisher, Vice President from Japanese Customer Sales for EMEA in London, discuss the BoJ’s decision to make YCC more flexible and recent policy updates from the ECB and Fed.
Will the BoE deliver another hawkish policy update in the week ahead?

July FOMC Preview – One (more) and done? Likely the last hike but they will stay data dependent in case inflation flares up again…

George Goncalves, MUFG Head of U.S. Macro Strategy, expects the Fed to deliver one more hike of 25bps at the upcoming July FOMC meeting. The FOMC statement should not see major tweaks at this time of the year, largely given that it’s a July meeting that sits between Jackson Hole and the September FOMC meeting updates (and also because the June FOMC meeting saw the Fed upgrade its forecasts on growth, inflation and rates).  
In order for the Fed to keep all options open and avoid hinting that this may be their last hike they need to keep forward guidance in place by keeping this phrase largely unchanged “In determining the extent to which additional policy firming may be appropriate.”  As George has mentioned before, until chair Powell strikes out the inflation concerns from the opening remarks in the presser, they are focused more on fighting inflation versus being overly concerned about the trajectory for growth. The presser is what ultimately determines how markets read chair Powell’s tone if this July hike was a dovish, neutral, or hawkish hike. We are leaning on the neutral to hawkish side.

BoJ YCC Policy Update with a Tokyo Perspective | The Global Markets FX Week Ahead Podcast

Next week is a busy schedule for the financial markets with the FOMC, ECB and BoJ all meeting. Ahead of the BoJ meeting specifically, Derek Halpenny, Head of Research Global Markets EMEA & International Securities is joined by Sumino Kamei, Senior Analyst, Global Markets, to discuss possible outcomes of the BoJ meeting.
Sumino provides an update on market expectations from a Tokyo perspective following the BoJ comments this week that has seen YCC speculation subside and explains why MUFG Bank continues to think a change in policy could happen. Derek provides his thoughts on the FX impact and possible broader market implications.

What’s behind the latest leg lower for the USD? : The Global Markets FX Week Ahead Podcast

Lee Hardman, Senior Currency Analyst, and Jack Greenslade from the Global Customer Marketing Group discuss the reasons behind the latest sell-off and whether it will continue. Inflation is also set to remain in focus for markets in the week ahead with the release of the latest CPI reports from New Zealand, Canada, the UK, the Eurozone and Japan. 

2023 1st half review and 2nd half outlook

George Goncalves, MUFG Head of U.S. Macro Strategy, reflects on the price action and economic developments of the 1st half and provides us with thoughts on some of the risks that may lie ahead in the 2nd half. George believes that the markets caught a big break on the back of overly defensive posturing resulting in investors having to chase performance and close out short-positions and underweight level to benchmarks during the start of the year. Granted economic conditions in the U.S. were more favorable than initially feared, the overall global backdrop, especially on manufacturing side continues to weaken. Meanwhile we have central banks that have returned to hiking and the Fed has signaled that they are not done either after having skipped at the June FOMC. In our view, after a somewhat muted reaction to Fed tightening we believe the long and variable lags may actually hit harder now as we go through the 2nd half. George remains skeptical the regional bank crisis is fully resolved and that coupled with off-shore dollar liquidity draining could serve as a catalyst for risk-off.
 

Federal Reserve vs BoJ policy – USD/JPY reversal: The Global Markets FX Week Ahead Podcast

Following the US jobs report from the US and ahead of the CPI data next week, Derek Halpenny, Head of Research Global Markets EMEA & International Securities discusses with Michael Owen, MUFG’s Head of Global Client desk for EMEA in London, the consequences for Fed policy, rates and the US dollar.
Derek also discusses the outperformance of the Japanese yen this week, highlighting developments that point to risks of a YCC change at the next BoJ policy meeting on 28th July.
Disclaimer: www.mufgresearch.com (PDF)

Intervention risk is back in focus for USD/JPY - The Global Markets FX Week Ahead Podcast

The JPY has weakened sharply during June falling below last year’s lows. Lee Hardman, Senior Currency Analyst, and Simon Mayes, Director of MUFG’s Global Customer Marketing Group for EMEA in London, discuss what has been driving recent JPY weakness & the risk of intervention.   

What next for FX and rates after key Central Bank meetings? The Global Markets FX Week Ahead Podcast

After two event-packed weeks including the FOMC, ECB and BoE meetings and Fed Chair Powell’s semi-annual testimony, Derek Halpenny, Head of Research, Global Markets EMEA and International Securities, discusses with Shan Husain, Vice President FI FX Sales, what the implications are for FX and rates going forward.
Derek also looks ahead to the ECB Annual Forum on Central Banking in Sintra, Portugal next week and the key incoming economic data that will help shape the direction of financial markets.
Disclaimer: www.mufgresearch.com (PDF)

What are FX implications of the latest Central Bank updates? The Global Markets FX Week Ahead Podcast

Lee Hardman, Senior Currency Analyst, and Abdul-Ahad Lockhart, Quant Analyst in London, discuss the main impact of the latest central bank updates from the BoJ, ECB, and Fed on FX markets. The GBP has hit fresh highs this week against other major currencies.
What are the main risks to the bullish trend in the week ahead?
Disclaimer: www.mufgresearch.com (PDF)

Summer Turnover Beating Expectations and the Set-up to 120 Mortgage Basis

In this month’s podcast, MUFG Head of Prepayment Modeling and Strategy, Glenn Schultz, reviews the implications of how turnover has exceeded market expectations and the implications for valuation across the coupon stack. Notably, we make the case a continued tightening of the current coupon basis and our year-end forecast of 120 basis points against the back drop of prepayment, FDIC bank liquidation, and origination volumes.

June FOMC Preview: A skip is in store but all about the messaging...

George Goncalves, MUFG Head of U.S. Macro Strategy, returns to highlight the scenarios he is expecting at the upcoming June FOMC meeting and the potential market implications. George thinks the aim will be to deliver a hawkish skip, will the markets hear that or something entirely different is what we will be trying to assess. Post Fed we think markets should turn their attention from inflation fears and central bank action towards the growth outlook. We believe quarter-end/month-end has the potential for some early fireworks before we get into the start of summer.

Japanese lifer earnings, cross-border securities flows and the June BoJ meeting – The MUFG Global Markets Podcast

The Nikkei Average remains well bid while USDJPY feels a bit more top-heavy. In contrast JPY rates and JPY basis remain little changed.
In today's episode, MUFG Chief Japan Strategist Takahiro Sekido discusses Japanese life insurance company fiscal year 2022 earnings, International Transactions in Securities data and the upcoming BoJ policy meeting. He also shares his views on spot Dollar/Yen, Yen rates, and Yen basis.
Disclaimer: www.mufgresearch.com (PDF)

Will the Fed reinforce USD sell-off? The Global Markets FX Week Ahead Podcast

Lee Hardman, Senior Currency Analyst, and Seiko Kataoka-Fisher, Vice President for Japanese Customer Sales for EMEA in London, discuss the potential impact of the upcoming FOMC meeting on USD performance.
Will the Fed follow in the footsteps of hawkish policy surprises delivered by the BoC and RBA over the past week?
Disclaimer: www.mufgresearch.com (PDF)

Exploring liquidity dynamics that may supercharge the Fed’s tightening efforts during the summer…

With the debt ceiling resolution behind us, George Goncalves, MUFG Head of U.S. Macro Strategy, returns to recap what feels like a market that is in a holding pattern until the passage of the CPI print and the FOMC meeting. He also discusses the medium-term risks with a keen focus on liquidity dynamics. The Treasury will be replenishing its General Account (TGA), which sits on the Fed's liability side of the balance-sheet via raising cash from T-bill issuance. At a minimum, this will likely result in a crowding out effect and at a maximum level, drain market liquidity. Given some areas of the banking system remain fragile and in need of funding, it’s critical to watch how this plays out over the summer. With QT ongoing and the Fed aiming to keep rates higher for longer, this liquidity story can supercharge the Fed’s tightening efforts ahead.

The Nikkei flirts with valuations not seen in over a generation as the Yen depreciates while Yen rate and basis remain highly unchanged – The MUFG Global Markets Podcast

The Nikkei Average continues its upward climb. USDJPY has kept pace, topping the 140-mark. On the other hand, JGB yields and JPY basis have remained little changed.
In today's episode, MUFG Chief Japan Strategist Takahiro Sekido reviews asset price developments during May and looks ahead to June based upon BoJ monetary policy and fiscal and monetary fund flows. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
Disclaimer: www.mufgresearch.com (PDF)

The Elephant in the Room – US Long-term Debt Outlook | The MUFG Global Markets Podcast

Following the stronger than expected US jobs report, Derek Halpenny, Head of Research, Global Markets EMEA and International Securities discusses with Julie Ellert, Head of Frabelux FX Corporate Sales, what the implications are for the US dollar and the FOMC meeting later this month.
Derek also outlines what he calls “the elephant in the room” following the debt ceiling deal – that is the terrible long-term debt outlook for the US. This issue will have to be tackled in the coming years which point to weaker growth and a weaker US dollar.

The USD is bouncing back - is there anything that can stop it? The Global Markets FX Week Ahead Podcast

Lee Hardman, Senior Currency Analyst, and Seiko Kataoka-Fisher, Vice President of Japanese Customer Sales for EMEA in London, discuss the turning around of the USD and whether it is likely to continue in the week ahead of the US debt ceiling crescendo.
However, the biggest, hawkish repricing of central policy has been in the UK. How does this impact the pound?
Disclaimer: www.mufgresearch.com (PDF)

Debt ceiling impasse shall pass but is it distracting us from other larger risks ahead?: The MUFG Global Markets Podcast

George Goncalves, MUFG Head of U.S. Macro Strategy, returns to give us an update on the current status of the debt ceiling negotiations. He explores scenarios of how this impasse may conclude and potential market implications. George also takes us through his latest Fed thinking, taking into account all of the recent Fed speakers. He also provides us with a mini-preview of what to expect at the June FOMC meeting. George looks further down the road on how the Fed may shift towards easing and what to do with QT and the supersized RRP. Lastly, if that was not enough to get one’s arms around, George provides a list of what else is on his risk radar.

Strength in the Nikkei and Dollar/Yen stand in sharp contrast to lackluster price action in JGBs and cross-currency basis: The MUFG Global Markets Podcast

The Nikkei Average and Dollar/Yen keep climbing higher. Meanwhile, Yen rate and Yen cross-currency basis remain little changed. Now that the G7 Summit in Hiroshima is over, speculation about whether Prime Minister Fumio Kishida will disband the Lower House and call for elections is growing.
In today's episode, MUFG Chief Japan Strategist Takahiro Sekido gives his view on triggers in the wake of the G7 Summit in Hiroshima as well as his analysis of the latest April JSDA data. He also shares his outlook for spot Dollar/Yen, Yen rate, and Yen basis.
Disclaimer: www.mufgresearch.com (PDF)

Is USD strength sustainable? The Global Markets FX Week Ahead Podcast

Optimism of a deal being agreed to lift the debt ceiling in the US has helped lift the dollar this week. Derek Halpenny, Head of Research, Global Markets EMEA and International Securities, explains to Shan Husain, Vice President, FI FX Sales, why he remains unconvinced over the sustainability of the move stronger for the dollar and expects the positive momentum to fade.
Derek looks ahead to next week with UK inflation also in focus which will be key for the outlook for the pound.
Disclaimer: www.mufgresearch.com (PDF)

How will political developments impact monetary policy in Japan?: The MUFG Global Markets Podcast

Dollar/Yen is higher, Yen rates are little changed, and Yen cross-currency basis has started to widen slightly. Major Japanese banks have released their FY23 earnings results in mid-May, to be followed by major lifers. Bank of Japan Governor Kazuo Ueda will be watching financial system stability as he determines his next monetary policy steps.
In today's episode, MUFG Chief Japan Strategist Takahiro Sekido discusses recent political developments, cross border flows, and implications for financial markets. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
Disclaimer: www.mufgresearch.com (PDF)

The Kings of Carry, Convexity Cross, and U.S. Debt Ceiling Brinksmanship: The MUFG Global Markets Podcast

In today’s episode, MUFG Head of Prepayment Modeling and Strategy, Glenn Schultz, reviews April remittance data highlighting the ‘Kings of Carry’ and relative value around the convexity cross, and the outlook for the agency mortgage basis given the FDIC liquidations current U.S. budget negotiation. He also discusses the possible implications of the debt ceiling brinksmanship on both the GNMA and Conventional MBS sectors.
Disclaimer: www.mufgresearch.com (PDF)

What’s behind the USD rebound? The Global Markets FX Week Ahead Podcast

Lee Hardman, Senior Currency Analyst, and Michael Owen, Head of Global Client Desk EMEA, discuss the USD’s recent performance and Bank of England’s policy update. After a better week for the USD, is the tide beginning to turn?  
Disclaimer: www.mufgresearch.com (PDF)