Global Markets Podcasts

In today’s podcast, MUFG Head of Agency Mortgage Strategy and Prepayment Modeling, Glenn Schultz, touches on the ideas of the “fence sitter” and how this impacts mortgage prepayment rates, why we are seeing buyouts in low delinquency pools, and the increase in 120+ past due stratifications.

In today’s episode, MUFG Chief Japan Strategist, Takahiro Sekido, breaks down recent price action in Tokyo and discusses Japanese and overseas investor cross-border flows. He also shares his outlooks for Dollar/Yen, Yen rates, and Yen basis ahead of the BoJ’s monetary policy review.

With such a favorable economic backdrop and with risk of an FOMC taper announcement in 2H-2021, John’s models continue to predict a further steepening of the 2s-10s and 2s-30 Treasury yield curve over the medium-term.

In February, JPY rates rose, and USDJPY rose as U.S. rates moved higher. Even the day after the benchmark U.S. Treasury yield touched 1.6% late in February, the BoJ did not indicate it would implement operations to stall a JPY yield rise, allowing upward pressure on U.S. rates to spread to JPY rates. Then, before the BoJ needed to act, Japanese investors stepped in to stem the sell-off.

In today’s episode, MUFG Chief Japan Strategist, Takahiro Sekido, breaks down recent price action in the Tokyo market as well as discusses BoJ JGB buying operations, the MoF JGB auctions, and previews the upcoming BoJ monetary policy review. He also shares his outlook for Dollar/Yen, Yen basis, and Yen rate.

The New Zealand Dollar is continuing to underperform following a dovish update from the RBNZ; with negative rates still on the cards for New Zealand next year, Lee Hardman, Currency Analyst, gives us his outlook.

Lee also takes a look at the Turkish Lira, which is seeing continued downward pressure, with USD/TRY trading close to record highs. Will Turkey’s central bank be decisive enough this week to help stabilise the Lira? Listen now for more. 

In this week’s podcast, U.S. Rates Strategist, John Herrmann, does a deep dive into both the establishment survey and the household survey. He finds a few distortions in the technical aspects of the payroll report that may turn around quickly to support payroll computations over the months of February through June 2021. For the unemployment rate, John’s work continues to uncover the roles played by two significant forces that act to depress the reported U3 unemployment rate (by a few hundred basis points).

All combined, John remains confident that his year-end forecast for the U3 unemployment rate likely may be attained – that of 4.042% – which is far lower than the FOMC’s projection (5.00%), lower than the consensus estimate (5.50%), and lower than even the lowest estimate in the Bloomberg survey (4.10%). In John’s view, markets “taper chatter” likely will become quite loud as the year progresses.  

In today’s podcast, MUFG Head of Agency Mortgage Strategy and Prepayment Modeling, Glenn Schultz, discusses the January 2021 prepayment speeds and explores if speeds are slowing down and if we are seeing burnout in the premium sector.

In Japan, Tochigi prefecture lifted the State of Emergency on February 7, though 10 prefectures including Tokyo city will likely maintain it until March 7. With the chill of February, the COVID-19 pandemic should not be considered a thing of the past. USDJPY rise paused after U.S. employment data was released at the end of last week. JPY buying flows could pick up in February. The BoJ announced it plans to scale back on buying JGBs this month. The MoF will also meet this by cutting issuances of TDBs. Japan is putting its own version of Modern Monetary Theory (MMT) into practice.

In today’s episode, MUFG Chief Japan Strategist, Takahiro Sekido, discusses the MoF’s outlook for the fiscal balance in February, key points for Japan’s 2020 Balance of Payments, and January cross border flows. He also shares his outlooks for Dollar/Yen, Yen rates, and Yen basis.

In this episode, U.S. Rates Strategist, John Herrmann cites several upside risks for growth at the start of the new year 2021, and he believes that the FOMC might very soon acknowledge a strengthened outlook by the March 16-17 FOMC Meeting. By the June 15-16 Meeting, it should be quite evident to all participants that the U.S. economy is either tracking its strong growth outcome or not. Should our growth-strengthened growth forecast prove accurate, then, might the Committee begin a more outward (and inward) discussion over “tapering” of asset purchases – by mid-summer 2021 or by the Jackson Hole Symposium?

With a tug-of-war ongoing in the third wave of Japan’s struggle against the COVID-19 pandemic, the Suga Administration will have to decide about extending the current State of Emergency. The Bank of Japan has started to gradually lay the groundwork ahead of the assessment of monetary easing planned for March, and downside room for JPY rates appears to be more limited. With yield gaps among key currencies still narrow, USDJPY has remained in a tight range and JPY basis have not shown much volatility.

In today’s episode, MUFG Chief Japan Strategist, Takahiro Sekido, discusses the BoJ’s JGB buying plans for February and the Summary of Opinions from the Monetary Policy Board meeting last month. He also presents his recent study on the relative size of central bank balance sheets on cross-currency basis and shares his outlooks for Dollar/Yen, Yen rates, and Yen basis.