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.
Suga’s fiscal stimulus and December MoF fiscal flow projections hint at fiscal year 2021 JGB issuance: The MUFG Global Markets Podcast
The autumn Diet session ended on December 5. A risk of increased JGB issuances is lurking amidst the government ruling coalition’s announcement of a 15-month budget in mid-December and the Ministry of Finance’s release of its FY21 JGB issuance plans later in the month. Ahead of this, spot Dollar / Yen and Dollar / Yen cross-currency basis have been fairly flat and the Nikkei Average has stabilized around 26,000. The coronavirus crisis roiled markets in 2020, but markets in Tokyo are closing the year calmly.
In today’s episode, MUFG Chief Japan Strategist, Takahiro Sekido, previews economic stimulus, reviews the Bank of Japan’s monetary operations in November, discusses fiscal fund supply and demand in December, and examines recent investor cross-border flows. He also offers his outlook for Yen rate, Dollar / Yen cross-currency basis, and spot Dollar / Yen.
Brexit negotiations reach end game: The Global Markets FX Week Ahead Podcast
With ongoing speculation around a no-deal Brexit, the markets continue to bounce as sterling’s volatility continues. With the ECB meeting on Thursday, the expectations of an extension to the quantitative easing programme and no rate cuts will strengthen.
MUFG’s Research Desk highlights a short US dollar and Swiss Franc, outperforming other G10 currencies, as well as a short Aussie dollar against the US buck (please note Derek meant to say “long Aussie dollar” at 10.22).
Derek Halpenny, Head of Research Global Markets EMEA and International Securities, discusses how the next 48 hours will be crucial in determining the outcome for the markets and Britain’s future as a whole.
What next for OPEC+ after its fractious, face-saving agreement? The MUFG Global Markets Podcast
The dizzying risk-on momentum in November stemming from the euphoria over vaccines was pricing in future hope, but not the immediate realities of a worsening virus surge on both sides of the Atlantic, which adds uncertainty to short-term oil demand. This, in conjunction with sustained higher crude prices – and a rosier outlook for the global economy next year – put OPEC+ in difficult position in confronting its dynamic role in balancing oil markets as it met this week.
Ehsan Khoman, Head of MENA Research and Strategy, believes that the divergence amongst OPEC+ members does not bode well for collective unity in 2021, and the sustainability of the group’s strategy of supporting prices (over defending market share) will be bought into question in the months ahead.
Are monthly payroll gains about to enter a “soft patch” and what factors may cause payroll growth to surge over most of 2021?: The MUFG Global Markets Podcast
As we get closer to the start of the next calendar year, we are tightening up our models forecasts, while assessing the recovery, thus far, over the year 2020. For the November employment report, John Herrmann outlines his models forecasts for another sharp decline in the U3 unemployment rate and for a solid gain in private sector payrolls. However, John’s models glean adverse risks for employment growth over the coming few months thereafter. By early spring, however, John’s models turn strongly constructive, and the 3rd Quarter may achieve a growth rate in real GDP in excess of +8.00% q/q SAAR.
In this episode, MUFG’s U.S. Rates Strategist, John Herrmann, shares our clients’ concerns for the very near-term, over the medium-term, and longer-term and also how his forecasts for economic and employment growth significantly outpace both the consensus estimates and the official projections of the FOMC. Is another “taper tantrum” in the offing over the second half of the year 2021?
Lessons from the 2020 COVID-19 Pandemic and the 2021 JPY Cross-Asset Outlook: The MUFG Global Markets Podcast
2020 was altered in previously unimaginable ways by the COVID-19 pandemic. In March, global financial markets became extremely volatile in reaction to the huge disruption in the real economy. Across the globe, governments and central banks responded with coordinated policy measures that boosted both share and bond prices, as well as basis arbitrage trading of key currencies, which kept FX spot rates in tight ranges. The Bank of Japan responded to the crisis by aggressively supplying funds to the market and buying corporate bonds and ETFs. The USD supply operations helped to stabilize USD funding for Japanese investors, while the corporate bond and CP buying supported the credit market. These moves helped to quell risk contagion for global financial markets, and the Tokyo market is fairly calm as 2020 draws to a close. Compared to previous crises, like the late 1990s and 2008, JPY cross-asset pricing was very different this time.
In today’s episode, MUFG's Chief Japan Strategist, Takahiro Sekido, looks back on 2020 and shares his outlook for 2021. He also discusses the lessons learned from the COVID-19 crisis and his outlook for Dollar/Yen, Dollar/Yen basis, and Yen rate.
USD slumps despite market optimism: The Global Markets FX Week Ahead Podcast
In this week's podcast, Lee Hardman, currency analyst, discusses market optimism following the continuing rally from COVID-19 vaccine developments, Biden's election win, possible advancements in Brexit trade talks and China's strengthening economy in year end.
Lee explains how this rosy outlook is benefitting a range of global currencies – all except USD, that is.
What can take oil (sustainably) above USD50 per barrel? The MUFG Global Markets Podcast
The recent encouraging developments surrounding COVID-19 vaccines has supported to lift Brent crude oil prices by around 30% since early November to ~USD49 per barrel, as markets begin to form new contours of normality towards a post-virus equilibrium.
Whilst, Ehsan Khoman, Head of MENA Research and Strategy, has remained resolutely bullish oil since early September, he believes that oil prices are racing ahead of even MUFG’s own consensus forecasts of year-end Brent and WTI at USD48/b and USD45/b, respectively. With this, he expects a near-term mild correction owing to three key reasons.
Click to listen to Ehsan’s analysis as he contextualises his thesis as to what can take oil (sustainably) above USD50/b.
What does cross-border flow data from September tell us about COVID-19 risk aversion and changes to the microstructure of the Tokyo market?: The MUFG Global Markets Podcast
COVID-19 patient numbers are on the rise, and the third wave of the COVID-19 pandemic has started to put limits on economic activity. The positive surprise of coronavirus vaccines showing success lasted only a few days, and fears about the growing pandemic have offset the positive news. Looking ahead, the Northern Hemisphere is heading into winter and concerns about other, non-coronavirus illnesses will likely mount. Global investors could focus more on risk aversion. Amidst a dearth of risk takers in the global financial markets, we think that the U.S. current deficit and low U.S. rates will likely support a weaker Dollar.
In this episode, MUFG’s Chief Japan Strategist, Takahiro Sekido, dissects trends in cross-border flows evident in recent data, as well as the Tokyo market’s microstructure amongst Japanese, overseas investors, and the BoJ. He also shares his outlook for Dollar/Yen, Yen swap rates, and Yen basis.
Recycling from USD to global currencies: The Global Markets FX Week Ahead Podcast
This week sees USD on weaker footing, and Derek Halpenny, Head of Research for Global Markets EMEA, explains why he expects 2021 to see further dollar depreciation.
Derek also looks at sentiment shifts which means Emerging Markets have seen inflows of USD 30bn in the three week period since the election; can this positive momentum from recent COVID-19 vaccine news be sustained?
Listen for analysis on this and the key market moving events for the week ahead.
OPEC+ meeting preview: The MUFG Global Markets Podcast
OPEC+ is in a spot of bother. The group is set to meet on 30 November and 1 December to determine the next phase of their historic production cuts that helped to carve out a floor under oil prices, at a time when high virus cases continue to weigh on global oil demand.
Ehsan Khoman, Head of MENA Research and Strategy, believes that the group will err on the side of caution and heed the market’s anxieties stemming from the virus resurgence on both sides of the Atlantic and unite behind a three-month delay in its next phase of tapering to April. This, he believes, will provide the group breathing space to adjust its reaction function to market conditions once the COVID-19 winter speed bump is hopefully behind us.
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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.