In this regular podcast series, MUFG subject matter experts within our business discuss the forces, indications, and policies that impact the U.S. economy and financial markets, and provide updates to their economic outlooks and forecasts for the weeks, months, and years ahead.
Japanese investors rebuild foreign bond positions while the BoJ makes small tweaks to monetary policy
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido shares his take on recent cross border investment data and the implications of recent changes to BoJ current deposit accounts, and also discusses developments in the Tokyo repo market during July and August. He also shares his views on Dollar/Yen, Yen rate, and Yen basis.
September JPY cross asset outlook and BoJ, fiscal trading triggers for JGBs and JPY basis
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido reviews what was an eventful end of the summer, shares his outlook for September, and discusses the BoJ’s JGB buying plans and the Ministry of Finance’s JGB yield assumptions in its FY23 budget proposal. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
September brings back-to-school trading environment
In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves recaps the key events of the last couple weeks of trading into and out of the Labor Day holiday in the U.S. He discusses the renewed hawkishness by central banks, which were taken up a notch at Jackson Hole. Meanwhile, Fed speakers kept the hawkish tone alive post-event, which has helped keep the direction of rates higher since. George highlights that a big driver of the U.S. rates move, especially out the curve, was the global rise in rates, where European and U.K. rates have actually risen more than what we have witnessed in Treasuries. Looking ahead, George will be watching if Fed speakers keep delivering a consistent message, and how hawkish or not the ECB will be at its upcoming policy meeting this week. George concludes that the Fed will likely do 75, so long as market pricing is at least 50/50 chance of a 75 hike at the September meeting.
Japanese investors start to rebuild foreign bonds positions after selling a record amount the first half of the year
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido reviews Japanese investor activity in foreign markets as reflected in Japanese Ministry of Finance data. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
Summer Sunday Burnout and the Mortgage Basis Outlook
In today’s episode, MUFG Head of Prepayment Modeling and Strategy Glenn Schultz reviews the July prepayment data, burnout in the moderately seasoned cohort and its implication for refinance risk in the new production cohorts, as well as the agency MBS basis relative value outlook.
Markets want a “Fed Pivot” and they may get a “Fed Pause” instead
In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves continues to suggest that the markets’ belief that the Fed has or is about to pivot is just wishful thinking and is more a narrative being used to explain the markets performance as of late. George thinks that inflation remains the Fed’s main focus. Even if the assumption is that the peak in headline inflation is behind us, so long as core PCE inflation stays elevated, it’s a binding constraint for them. Thus those in the marketplace expecting the Fed to dial back its hawkishness and/or eventually flip into easing in 2023 might be getting ahead of themselves.
In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves reviews the market price action post the strong July NFP report and what to look out for in the upcoming CPI report. At a minimum, the latest NFP report has made market participants put the “Fed pivot” concept on the backburner as the ongoing robust job growth, along with higher wage inflation, suggests that the Fed will have to lean harder to tightening monetary conditions to weaken aggregate demand.
Foreigners cover shorts in Japanese bonds while Japanese investors show signs that they are done selling foreign bonds
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido reviews cross-border security flows and changes to the monetary base during the month of July. He also shares his view on spot Dollar/Yen, Yen rate, and Yen basis.
Markets are trying to pivot for the Fed
In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves explains that the broader markets are increasingly more concerned about recessions and growth versus just focused on inflation, however the Fed has not taken its eye off of the elevated levels of inflation. Thus it’s too early for markets to force a pivot and rally on bad news, as if the Fed would come to the rescue and stop hiking and/or ease. We think a couple more hikes are in store for 2H22 and that should keep curves inverted and eventually weigh on other asset classes, too. We briefly highlighted our views from a joint publication with the capital markets team on a piece called “Mixed Signals: An Assessment of US Recession Risk in the Year Ahead” reviewing our take on recessions and the signals we use to assess them.
External factors hold the key to trading opportunities in Japanese markets over the Obon holidays
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido reviews markets in July including the BoJ’s July Monetary Policy Board meeting and discusses potential JPY trading triggers for August. He also shares his views on Dollar/Yen, Yen rate, and Yen basis.
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Head of Rates Sales, Americas
New York, NY
Head of U.S. Macro Strategy
New York, NY
Chief Japan Strategist
Head of Agency Mortgage Prepayment Modeling and Strategy
The podcast content above is being provided for educational and informational purposes only. The information and comments are not the views or opinions of MUFG Union Bank, its subsidiaries or affiliates. Please consult your attorney, accountant or tax or financial advisor with regard to your particular situation.