2022 Signals “Regime Change” for Markets and Corporates, MUFG Says
Factors for consideration include rising rates, monetary and fiscal stimulus, the prospect of greater volatility, and the shift toward mid-cycle recovery
NEW YORK, NY, (January 24, 2022) – The Capital Markets Strategy team at Mitsubishi UFJ Financial Group ( MUFG) released its annual outlook to C-suite executives analyzing how corporate strategy is transitioning to a post-pandemic world in 2022 amid rising interest rates, a pivot to tightening in monetary and fiscal policy, and the prospect of higher volatility.
“2022 will be a time of ‘regime change’ for the global economy, policy and markets, as we have accelerated rapidly into a mid-cycle recovery characterized by decelerating growth, policy tightening and higher volatility,” writes Tom Joyce, Head of Capital Markets Strategy, along with Director Hailey Orr and Associate Stephanie Kendal. “Visibility remains low for accurately forecasting economies and markets.”
The team notes that, against this backdrop of global rebalancing, corporates have embarked on a “feverish pace” of capital-expenditure (CAPEX) investment and strategic activity in response to a rapidly evolving landscape that includes elevated government regulation, vertical integration of supply chains, and massive investments in technology, innovation and sustainability.
The team’s 2022 global markets and economic outlook spans the following areas:
- Global economy rebalancing : A detailed assessment of global growth, policy tightening, supply chain dislocations and broadening inflation, with a view toward moderation in late-2022 and early-2023
- Regime change in markets : An analysis of the structural transition underway in the global economy and markets, including the impact of technology innovation and the “greening” of the financial system
- Strategic positioning from strength : A review of the remarkable strategic adjustments that corporates have made during the COVID-19 pandemic, fortifying their balance sheets for a new period of elevated investment and strategic activity
- Investing in a post-pandemic world : A spotlight on the accelerating CAPEX cycle underway, historic M&A volumes, technology’s transformative impact on business strategy and the importance of keeping pace with environmental, social and governance (ESG) factors
- Resilient credit markets : A review of the U.S. dollar-denominated credit market, which is a deep, liquid market offering more continuity than change (especially as compared with other markets and economies globally during the pandemic), and whose technical and fundamental drivers remain strong
- A new era of big government : An assessment of “regulatory activism” (which has increased globally over the last decade following massive government rescue efforts during the financial crisis of 2008-2009 and the COVID-19 pandemic) and the role of government in “policy de-globalization”, infrastructure spending, climate transition, and anti-trust merger scrutiny
The full report can be accessed here or by visiting the following link: https://www.mufgamericas.com/sites/default/files/document/2022-01/2022-global-markets-economic-outlook.pdf
About Mitsubishi UFJ Financial Group, Inc.’s U.S. Operations including MUFG Americas Holdings Corporation
The U.S. operations of Mitsubishi UFJ Financial Group, Inc. (MUFG), one of the world’s leading financial groups, has total assets of $319.8 billion at September 30, 2021. As part of that total, MUFG Americas Holdings Corporation (MUAH), a financial holding company, bank holding company, and intermediate holding company, has total assets of $164.6 billion at September 30, 2021. MUAH’s main subsidiaries are MUFG Union Bank, N.A. and MUFG Securities Americas Inc. MUFG Union Bank, N.A. provides a wide range of financial services to consumers, small businesses, middle-market companies, and major corporations. As of September 30, 2021, MUFG Union Bank, N.A. operated 298 branches, consisting primarily of retail banking branches in the West Coast states. MUFG Securities Americas Inc. is a registered securities broker-dealer which engages in capital markets origination transactions, domestic and foreign debt and equities securities transactions, private placements, collateralized financings, and securities borrowing and lending transactions. MUAH is owned by MUFG Bank, Ltd. and Mitsubishi UFJ Financial Group, Inc. MUFG Bank, Ltd., a wholly owned subsidiary of Mitsubishi UFJ Financial Group, Inc., has offices in Argentina, Brazil, Chile, Colombia, Peru, Mexico, and Canada. Visit www.unionbank.com or www.mufgamericas.com for more information.
Mitsubishi UFJ Financial Group, Inc., (MUFG) is one of the world’s leading financial groups. Headquartered in Tokyo and with over 360 years of history, MUFG has a global network with approximately 2,500 locations in more than 50 countries. The Group has about 170,000 employees and offers services including commercial banking, trust banking, securities, credit cards, consumer finance, asset management, and leasing. The Group aims to “be the world’s most trusted financial group” through close collaboration among our operating companies and flexibly respond to all of the financial needs of our customers, serving society, and fostering shared and sustainable growth for a better world. MUFG’s shares trade on the Tokyo, Nagoya, and New York stock exchanges.
For more information, visit https://www.mufg.jp/english