In this weekly podcast series, John Herrmann, MUFG U.S. Rates Strategist, along with other subject matter experts within our business, discuss the forces, indicators, 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 year ahead.
The February Jobs Report – An initial step before a very big upswing in jobs growth?
March 4, 2021
U.S. Rates Strategist John Herrmann previews the February employment report. He believes that the February job gain likely may be a solid one, close to +224.1K mom, but that this gain may pale in comparison to the pace of job growth over the months of March through June, which may average stronger than +500.0 per month.
Japanese investors sell foreign bonds in reaction to carnage in global bond markets, but leave footprints of buying more recently
March 3, 2021
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.
Recent Japanese investor activity in U.S. bond markets from U.S. TIC and MoF BoP data
February 23, 2021
In today’s episode, MUFG Chief Japan Strategist, Takahiro Sekido, discusses the reasons behind the changes in JPY rates and basis, policy triggers for the Suga Administration and BoJ Governor Kuroda, as well as U.S. bond flows among Japanese investors. He also shares his outlooks for Dollar/Yen, Yen rates, and Yen basis.
Why are we even mentioning the word “taper” and should employment in 2021 be nearly as weak as in January?: The MUFG Global Markets Podcast
February 11, 2021
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).
Terminal Velocity: January 2021 Prepayment Speeds
February 10, 2021
In today’s podcast, MUFG’s 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.
Decreasing Japan Treasury Discount Bill issuance, a pick-up in Japanese foreign direct investment, and cross border investment flows
February 9, 2021
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.
How soon might the FOMC boost its growth projections and might “taper” be openly discussed by the Jackson Hole Symposium?
February 4, 2021
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?
An in depth study of G7 monetary policy and cross-border flows ahead of the BoJ’s upcoming policy assessment
February 2, 2021
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.
The January BoJ policy meeting, personnel changes at the BoJ, and Japanese investor purchases of MBS and other USD fixed income
January 26, 2021
In today’s episode, MUFG Chief Japan Strategist, Takahiro Sekido, discusses the BoJ’s January monetary policy meeting, policy board personnel, U.S. TIC data, and recent cross-border flows. He also shares his outlooks for dollar/yen, yen rates, and yen basis.
Will President Joe Biden’s $1.9 trillion super-stimulus proposal “overheat” the economy or cure its ailments?
January 21, 2021
In today’s podcast, MUFG U.S. Rates Strategist, John Herrmann reviews his models arguments over the five economic tailwinds for the U.S. recovery in years 2021 and 2022. Even with a timely rollout of vaccinations, there remains lingering, yet quite pronounced, structural deficiency within the economy. Namely, a labor force that was depleted by nearly 3 million individuals over the entire year of 2020, the largest annual decline in the labor force for any year since 1945, and by a wide margin.
Japanese pensions end 2020 by selling foreign stocks to buy foreign bonds while overseas investors start 2021 by buying a record amount of TDBs
January 20, 2021
In today’s episode, MUFG Chief Japan Strategist, Takahiro Sekido, dissects cross-border flows at the end of 2020 and the beginning of 2021. He also shares his outlooks for Dollar/Yen, Yen rate, and Yen basis.
Bond investors “Won’t Get Fooled Again”
January 14, 2021
In today’s podcast, MUFG’s U.S. Rates Strategist, John Herrmann, discusses that by the end of the 3rd Quarter 2021, and possibly sooner, most investors are likely to believe that an official “taper and cease” announcement may occur prior to the end of the year. Unlike in 2013, however, we believe that most investors will not wait until the FOMC unveils an official “taper and cease” announcement to invest and trade it. Hence, our core strategic investment stance remains a 2s-30s Treasury yield curve steepener.
The year ahead in Agency MBS
January 13, 2021
In this episode, MUFG Head of Agency Mortgage Strategy and Prepayment Modeling, Glenn Schultz, discusses MUFG’s 2021 forward outlook in prepayment speeds, mortgage origination volumes, primary and secondary spreads, and investor appetite.
What do changes in December fiscal flows, BoJ monetary operations, and base money mean for USDJPY, cross-currency basis, and JPY rate?
January 12, 2021
In today’s episode, MUFG Chief Japan Strategist, Takahiro Sekido, discusses developments with fiscal financing, the BoJ’s monetary operations, and the monetary base in December and what they could mean for the BoJ's monetary policy review in March. He also shares his outlooks for USDJPY, cross-currency basis, and JPY rate.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Does the 2s-30s Treasury yield curve steepener have room to run, or is it out of gas?
January 7, 2021
In this episode, MUFG's U.S. Rates Strategist, @John Herrmann, discusses that should our models forecasts prove accurate, the FOMC’s objective of achieving “substantial further progress… towards the Committee’s maximum employment and price stability goals” likely may be evident before year-end 2021, or early on in 2022. Might bond market participants anticipate an official FOMC announcement over “taper and cease” of asset purchase programs near that timing? We continue to think so, possibly adding a final push to the yield curve steepener.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
COVID-19 skews JGBs and JPY basis through early 2021 as JPY arbitrage flows pick up
January 5, 2021
In today’s episode, MUFG Chief Japan Strategist, Takahiro Sekido, reviews JPY rates and basis at the end of 2020 and the start of 2021. He also discusses the skewed JPY basis market and upward pressure on the front end of the JPY yield curve at the end of 2020. He offers his outlook for JPY rates, basis, and USDJPY.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Record JGB issuance announced just days after the BoJ announces a surprise review of monetary policy suggests Modern Monetary Theory in practice
December 22, 2020
In today’s episode, MUFG Chief Japan Strategist, Takahiro Sekido, shares his thoughts on the BoJ’s monetary policy assessment, the Suga Administration’s FY21 JGB issuance plans, the BoJ’s USD fund buying from the MoF, and cross-border flows. He also goes through his outlook for Yen rate, cross-currency basis, and Dollar / Yen.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Is Powell reading from our playbook?
December 17, 2020
Chair Powell put it quite succinctly in the Q&A portion of the FOMC’s Press Conference to the December 15-16 Meeting, “The combination of the Cares Act and the strong monetary policy stimulus propelled a recovery that was, frankly, far stronger than we expected back in April, May, and June.” In this much anticipated FOMC Meeting, Chair Powell covered so much ground, and in this podcast, U.S. Rates Strategist, John Herrmann, attempts to bring it all to life.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Fiscal spending drives record JGB issuance while both foreign and Japanese investors engage in massive cross-border flows
December 15, 2020
In today’s episode, MUFG Chief Japan Strategist, Takahiro Sekido, discusses JGB trends in light of Prime Minister Suga’s additional economic stimulus measures and the third supplementary budget, as well as takeaways from the December Tankan survey. He also reviews recent cross-border flows and shares his outlook for Dollar / Yen, cross-currency basis, and Yen rate.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
December FOMC meeting preview: Upgraded forecasts and upgraded qualitative easing?
December 10, 2020
In this episode, MUFG U.S. Rates Strategist, John Herrmann, previews the December FOMC meeting. John expects the FOMC to strengthen its GDP growth estimates and to lower its unemployment projections. He also thinks there is a decent chance that Chair Powell convinces the Committee to extend the duration of its Treasury security purchases and/or increase its monthly pace of Treasury purchases. These actions would support the economy in the face of current COVID-19 strains and also serve to restrain the extent of the sell-off in the back-end of the yield curve as the economy moves into many consecutive quarters of strong economic growth starting in Q2 2021.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Suga’s fiscal stimulus and December MoF fiscal flow projections hint at fiscal year 2021 JGB issuance
December 8, 2020
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.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Lessons from the 2020 COVID-19 Pandemic and the 2021 JPY Cross-Asset Outlook
December 1, 2020
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.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
What does cross-border flow data from September tell us about COVID-19 risk aversion and changes to the microstructure of the Tokyo market?
November 24, 2020
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.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Might an unthinkable level of COVID-19 infections catalyze further fiscal and monetary stimulus?
November 19, 2020
In this episode, MUFG’s U.S. Rates Strategist, John Herrmann, finds that the complexion of risk factors remains supportive of his models forecast for real GDP growth over the 4th Quarter, of near +6.00% q/q annualized, or near -2.10% on a 4q/4q year-over-year rate. However, the very same factors point to a potentially worrisome outcome for 1st Quarter’s real GDP growth rate, of weaker than +1.00% q/q annualized – but with some risk of an economic contraction. Again, it is ironic that the U.S. Congress can be united only by risk of a near unthinkable rate of community spread of COVID-19 (and its implications for risk of an economic contraction)! As this drama plays out, waiting in the wings, the members of the FOMC begin their review of the policy toolkit to decide how best to support, prolong, and enhance U.S. economic recovery.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Upcoming changes to BoJ yield curve control, cross-border flows, and Japan’s GDP recovery
November 17, 2020
In this episode, MUFG’s Chief Japan Strategist, Takahiro Sekido, dissects the Jul-Sep GDP report and discusses its implications. He also reviews recent cross-border investment flows and shares his outlook for Dollar / Yen, Yen rate, and Dollar / Yen cross-currency basis.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
GDP forecast and the impact on delinquency rates and forbearance
November 11, 2020
In this episode, MUFG Head of Agency Mortgage Strategy and Prepayment Modeling, Glenn Schultz, gives us an overview of the most recent prepayment report and how those numbers compare to our Katana machine learning model projections. He also discusses prepayment expectations on the 30-year 1.5 coupon, as well as the impact of the GDP forecast on delinquency rates and forbearance.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Demand for BoJ Dollar fund-supply operations disappears, the October BoJ meeting, and the outlook for FX and rates following the U.S. election
November 10, 2020
In this episode, MUFG’s Chief Japan Strategist, Takahiro Sekido, analyzes the October monetary base data and discusses USD fund-supplying operations as well as the “Summary of Opinions” from the October BoJ meeting. He also updates his views for Dollar / Yen, yen rate, and Dollar / Yen cross-currency basis.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
The October employment report, and what would a Republican Senate mean for Jay Powell?!
November 5, 2020
In this episode, MUFG U.S. Rates Strategist, John Herrmann, previews the October employment report, including his forecasts for non-farm payrolls and the unemployment rate. He also discusses the rebound in the broad economy in the context of the October FOMC meeting.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Japanese lifers return to JGBs while eyeing U.S. credit and global alternative investment opportunities
November 3, 2020
In this episode, MUFG Chief Japan Strategist, Takahiro Sekido, discusses Japanese lifers’ investment plans for the second half of fiscal year 2020 and their implications on JGBs, Dollar/Yen, and Dollar/Yen cross-currency basis.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Seeking JGB, Samurai bond, Dollar / Yen cross-currency basis, and FX opportunities at the start of Suga’s inaugural extraordinary Diet session
October 27, 2020
In this episode, MUFG’s Chief Japan Strategist, Takahiro Sekido, discusses Suga administration’s policy challenges, the October BoJ meeting, and gives a Yen Samurai primary market update. He also details implications, and his views for Dollar / Yen, Dollar / Yen cross-currency basis, and Yen rate.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Next week’s GDP report to show a robust rebound in growth…but then what?
October 22, 2020
In this episode, MUFG U.S. Rates Strategist, John Herrmann, takes listeners through the details of his tracking estimate for 3Q-2020 GDP. He discusses his more medium-term outlook and the role fiscal stimulus plays. He also explores the implications of those forecasts on his investment thesis, the 2s30s yield curve steepener.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Optimism in the September BoJ Tankan survey, large buying of EUR-denominated bonds, and rotation into USD spread product
October 20, 2020
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.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Brace yourselves for another rapid decline in the unemployment rate
October 15, 2020
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.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
U.S. election enters the final stretch
October 14, 2020
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.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
A jobs slowdown or just another Bureau of Labor Statistics mismeasurement?!
October 9, 2020
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.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
What do samurai swords and prepayment speeds have in common?
October 8, 2020
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.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Another robust employment report? For how much longer?
October 1, 2020
In this episode, MUFG U.S. Rates Strategist, John Herrmann, previews the September employment report, including his forecasts for non-farm payrolls and the unemployment rate. He also discusses, more generally, why he's more optimistic on employment and growth than the consensus, the Fed, and other official forecasts.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Backtesting exchange-traded funds purchases under Abenomics for the benefit of “Suganomics”
September 29, 2020
In this episode, MUFG Chief Japan Strategist, Takahiro Sekido, tests market reaction to the Bank of Japan’s exchange traded funds purchases during Abenomics and takes a look at USDJPY, JPY rates, and JPY basis as “Suganomics” enjoys its honeymoon period.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Is the Phillips curve dead in the Fed’s new monetary policy framework?
September 23, 2020
In this episode, MUFG U.S. Rates Strategist, John Herrmann, continues to try to enhance listeners’ understanding of the Fed's new framework.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Monetary policy with “employment as a broad based, inclusive goal”
September 17, 2020
In this episode MUFG U.S. Rates Strategist, John Herrmann, breaks down the September FOMC meeting in light of the Fed's new monetary policy framework and tells listeners what it means for his core strategic investment stance for a 2s-30s Treasury yield curve steepener.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
USDJPY, JPY rate, and JPY basis in the “Suga era”
September 15, 2020
In this episode, Takahiro Sekido, Chief Japan Strategist of Global Markets Research, MUFG Bank Tokyo discusses Japan’s new administration, cross-border flows, and his views on USDJPY and JPY rates and JPY basis.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Can employment gains drive the unemployment rate to a “six-handle” by year-end?
September 10, 2020
In this episode MUFG U.S. Rates Strategist, John Herrmann, reviews the August employment report, including his forecasts for non-farm payrolls and the unemployment rate versus the actual results. He also explores the implications of the number on his outlook for the economy, the yield curve, and the Fed.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Japan’s monetary base, the Tokyo repo market, and cross-border flows ahead of quarter-end
September 9, 2020
In this episode, Takahiro Sekido, Chief Japan Strategist of Global Markets Research, MUFG Bank Tokyo discusses Japan’s monetary base, JPY fund supply and demand, the Tokyo repo market, cross-border flows, and his views on USDJPY and JPY rate and JPY basis.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Will the unemployment report trounce expectations, yet again?
September 3, 2020
In this episode, MUFG U.S. Rates Strategist, John Herrmann, previews the August employment report, including his forecasts for non-farm payrolls and the unemployment rate. He also explores the implications of those forecasts on his investment thesis, the 2s-30s yield curve steepener.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
What happens when you take the “Abe” out of Abenomics?
September 1, 2020
In this episode, Takahiro Sekido, Chief Japan Strategist of Global Markets Research, MUFG Bank Tokyo discusses the impact of Abe’s resignation on markets and cross-border flows as well as updates of his view on the Yen, Yen rates, and Dollar/Yen cross-currency basis.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
The FOMC’s growth projections are far too pessimistic, will they shift at this week’s virtual symposium?
August 26, 2020
In this episode, MUFG U.S. Rates Strategist, John Herrmann, previews this week’s virtual Jackson Hole Symposium and discusses what our model is currently forecasting. He also gives listeners an update on his core strategic investment stance of a 2s-30s yield curve steepener.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Can the U.S. economy rebound +28.7% in Q3, yet still require a massive jolt of stimulus over the coming 18 months?
August 20, 2020
In this episode, MUFG U.S. Rates Strategist, John Herrmann, reviews forecasts over the coming 12 months and beyond and tells listeners what these structural imbalances might ultimately require. He also offers more insights on the upcoming U.S. election and gives listeners an update on his core strategic investment stance of a 2s-30s yield curve steepener.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
Navigating the twists and turns of employment, growth, and the U.S. election.
August 13, 2020
In this episode, MUFG U.S. Rates Strategist, John Herrmann, reviews July employment and Q2 GDP reports and tells listeners what these mean for the labor market and growth going forward. He also offers his take on the upcoming U.S. election and gives listeners an update on his core strategic investment stance of a 2s-30s yield curve steepener.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.
The 2020 US Election Heats Up.
August 12, 2020
Please note this podcast was recorded prior to Joe Biden announcing Kamala Harris as his VP.
In this episode, Hana Rudolph, of MUFG’s Washington DC Representative Office, examines current dynamics of the 2020 election outlook: how Biden’s VP pick, the upcoming party conventions, and presidential debates could impact the race, and what investors should pay attention to in the months ahead.
If you can’t view the above media player, this podcast is also available on Apple Podcasts and Spotify.