Global Markets Podcasts

The improvement in the diffusion index and large manufacturers’ expectations contained in the September Tankan survey was welcome news. That, however, comes at a time when the coronavirus pandemic may be re-accelerating globally, not to mention amid the uncertainty of the U.S. election and additional fiscal stimulus. Recent data shows an evolution in Japanese investment into foreign bonds while global affluent fund flows keep key currencies and interest rates in a narrow range. Risk aversion could result in Yen-strengthening stresses if the uncertainty ahead of the U.S. election grows. Investors should be watchful of growing JPY strengthening pressures against other key currencies.

In this episode, MUFG’s Chief Japan Strategist, Takahiro Sekido, discusses Japanese companies’ views of the economy as memorialized in the September BoJ Tankan survey, cross-border flows, and his views for Dollar / Yen, Dollar / Yen cross-currency basis, and Yen rate.

Safe haven currencies – USD, JPY and CHF – have outperformed in recent weeks as markets become more cautious about the global economic outlook, particularly in light of the sharp surge of COVID-19 cases in Europe, and the lack of optimism for agreement on a fiscal stimulus package ahead of the US election.

The pound is also one of the better performing currencies, despite more Brexit chaos following failed talks on a UK/EU trade agreement at last week's EU summit. Why is this? Lee Hardman, currency analyst at MUFG, explains on this week’s podcast.

Global air traffic is projected to decline by at least half in 2020 with most airlines predicting that business won’t return to pre-pandemic levels until 2023, at the earliest.

Ehsan Khoman, Head of MENA Research and Strategy, examines the how jet fuel demand is holding up and what this signals for global oil markets.  Listen to Ehsan’s analysis.

Brace yourselves. MUFG's John Herrmann just revised down his already low (U3) unemployment rate forecast to plunge to 6.25% by year-end 2020 (currently, 7.9%) and to 4.0% by year-end 2021 (our previous forecast, 4.6%). That only increases the gap between MUFG, the consensus, and "official" estimates like the FOMC and the IMF. Our updated forecasts are at least 150 bps lower than either the consensus estimate or the FOMC’s projections – not to mention that our forecasts are lower (by at least 40 bps) than every other estimate in the entire Bloomberg survey! As we are well aware, now, John Herrmann's growth expectations are similarly more optimistic. How will the FOMC and the yield curve react if MUFG's forecasts play out? Over the coming six to twelve months, as market and FOMC participants recalibrate their own expectations for the U.S. economy, might Treasury markets undergo a “mini” taper tantrum by late spring or early summer 2021?

In this episode, MUFG U.S. Rates Strategist, John Herrmann, reviews his revised unemployment rate forecast as well as discusses GDP and inflation forecasts. He also explores the implications of those forecasts on his investment thesis, the 2s-30s yield curve steepener.

With three weeks until Election Day on November 3, millions of Americans are already voting – in person and by mail. Polls show a sustained and recently growing lead by former Vice President Biden, but the impact of the COVID-19 pandemic on how votes will be cast and counted remains unclear. A win by President Trump cannot be ruled out.

In this episode, Jordan Heiber, Deputy Representative in MUFG’s Washington DC Office, looks at the state of the race, the risk that we may not know the outcome on election night, and the policies and priorities that investors should expect from Washington in 2021.

The prospect of economic growth in the UK is darkening, with figures showing a less than impressive level of growth for August. In this episode, Lee Hardman, currency analyst, outlines the rocky road ahead for the pound.

The markets are currently pricing in an optimistic scenario for Brexit negotiations ahead of the EU leaders' summit on Thursday, but will this positive momentum be dampened by the surge of COVID-19 cases in the UK?

Listen now for Lee’s forecasts for GBP and USD as Biden continues to take the lead in the election polls.

With starkly different policies on energy and environmental issues, the outcome of the upcoming US election will have a momentous impact on markets.

With less than a month to go, Ehsan Khoman, Head of MENA Research and Strategy, offers insights into why either a Trump or Biden administration will mean those trading oil, both now and post-election, will require new ways to assess, quantify, and hedge risk. Listen to Ehsan’s analysis.

Total U.S. nonfarm payrolls gained only +661.0K mom in September, weaker than John Herrmann's forecast and the consensus estimate. In contrast, private nonfarm payrolls gained +877.0K mom, stronger than his forecast and the consensus estimate. As John previewed, the Bureau of Labor Statistics did, in fact, under-count total education staffing, especially at K-12 public schools.

The especially “poor” September Repose/Collection Rate (just 70.4%) points to risk of a +225.0K to +325.0K upward revision to the September total nonfarm payroll outcome over the coming two monthly reports. The October monthly report likely may see a large gain in education payrolls as well. Lastly, the September report saw yet another big move down in the unemployment rate – spot on to John’s forecast of 7.9%. This decline partially reflects some 772.8K individuals who incorrectly reported themselves as “employed, but absent from work (other reasons)” – which suggests that the U3 rate for the month of September really may be as high as 8.3%. How is an investor to interpret these mixed messages?!

In this episode, MUFG U.S. Rates Strategist, John Herrmann, reviews a mixed September employment report, including his forecasts for non-farm payrolls and the unemployment rate versus the actual results. He also puts this in perspective versus the 38% rebound in growth he's expecting to occur in the 3rd quarter and discusses the steepening of the 2s-30s Treasury yield curve towards 191.1 bps target over the coming eighteen months.

MUFG’s Glenn Schultz discusses MUFG’s proprietary machine learning prepayment model and walks listeners through the relevant issues that mortgage investors should be paying attention to while surveying the prepayment landscape.

In this episode, MUFG Head of Agency Mortgage Strategy and Prepayment Modeling, Glenn Schultz, breaks down the impact of technology, the new adverse delivery fee, hardship forbearance, and delinquency buyout extension on prepayment rates going forward. He also dives into MUFG’s rate forecast and what this means for the 30-year mortgage rate going into 2021.

U.S. politics is still front of mind following President Trump’s diagnosis of COVID-19 last week. This development sent shockwaves through the markets, and could have repercussions for the upcoming election.

Derek Halpenny, Head of Research for Global Markets EMEA, gives his analysis of the situation and considers whether Biden has an advantage going forwards.

Also this week, Derek looks at possible scenarios for the UK’s economic recovery based on past data from the 2008 financial crisis. Spoiler alert: it’s far from optimistic. Listen here.