Global Markets Podcasts

In today’s podcast, MUFG 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.

In Japan, Tochigi prefecture lifted the State of Emergency on February 7, though 10 prefectures including Tokyo city will likely maintain it until March 7. With the chill of February, the COVID-19 pandemic should not be considered a thing of the past. USDJPY rise paused after U.S. employment data was released at the end of last week. JPY buying flows could pick up in February. The BoJ announced it plans to scale back on buying JGBs this month. The MoF will also meet this by cutting issuances of TDBs. Japan is putting its own version of Modern Monetary Theory (MMT) into practice.

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.

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?

With a tug-of-war ongoing in the third wave of Japan’s struggle against the COVID-19 pandemic, the Suga Administration will have to decide about extending the current State of Emergency. The Bank of Japan has started to gradually lay the groundwork ahead of the assessment of monetary easing planned for March, and downside room for JPY rates appears to be more limited. With yield gaps among key currencies still narrow, USDJPY has remained in a tight range and JPY basis have not shown much volatility.

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.

In the prepared statement and in the press conference, the Committee assessed that the U.S. economy likely slipped into a ‘soft-patch’ over the final seven weeks of the year 2020 and likely over the first four weeks or so of the year 2021. So, while the Committee downgraded the very near-term assessment of the economy, the Committee strengthened its medium-term outlook. Net-net, at the upcoming March Meeting’s SEP projections, the Committee likely may strengthen its real GDP growth estimate for years 2021 and 2022, we believe. Can the FOMC catch up to our models forecasts of +5.00% YoY growth in 2021 and +4.00% YoY growth in 2022?  Please, stay tuned!

In this episode, MUFG U.S. Rates Strategist, John Herrmann, previews the 4th Quarter GDP report, parses the various nuances and subtleties of the FOMC’s economic outlook and monetary policy stance, as well as tells listeners what it means for his core strategic investment stance for a 2s-30s Treasury yield curve steepener.

The Suga Administration has applied its state of emergency to 11 prefectures, but uncertainty about COVID-19 remains. With the inauguration of the new U.S. administration, risk sentiment has continued to improve keeping U.S. and Japanese stock markets calm. Downside room for yen rates is limited, and yen basis is steady. The dollar/yen rate has stayed in a narrow range. The Bank of Japan’s January Monetary Policy Meeting made no policy changes. Decisions appear to be on hold until the monetary easing assessment comes out in March.

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.

In today’s podcast, Lee Hardman, currency analyst, looks at the upcoming FOMC meeting and how this will be important for the dollar performance, giving his views on the likelihood of Chair Powell giving any signal of slowing of QE.

On the upside, the pound has been outperforming with cable rising above the 1.3700-level. The pound is tightly linked to the general improvement in risk sentiment with Global Equity Markets having risen to near record highs. This shows hopes for recovery in the second half of 2021, a welcome break in the clouds in what has been a dreary start to the year for the UK.

This week heralds a new chapter in the world order with Joe Biden becoming the 46th U.S. president. A life-long pragmatist, he looks likely to govern as one. Stylistically, that signals greater predictability, higher consistency, with a less transactional and a more rules-based multilateral approach.

Notwithstanding the reduction in risk premia across global markets, Ehsan Khoman, Head of Emerging Markets Research (EMEA), believes that the implications of a Biden presidency for emerging markets (EM) in the EMEA region are likely to be more nuanced than they may seem at first glance. Granted, a pivot towards a mix of political realism, mutual interests and democratic principles will shape the incoming administration’s strategy towards EM EMEA, but Biden’s team will need to work under the same constraints as those under Trump – the result of which will be that changes could be more subtle and less abrupt than widely anticipated.

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.

The economy over the near- and longer-term beckons for fiscal policy to remain both activist and aggressive, we believe.

Higher U.S. yields have not been tightly correlated to Japanese yields, but they have started to exert a gentle effect. While Japanese non-manufacturers have been hit by uncertainties surrounding the COVID-19 pandemic, Japanese manufacturers are enjoying a recovery for exports and production. The real economy and financial markets have not been moving in tandem. USDJPY, JPY rates, and JPY basis have remained in tight ranges, reflecting risk management mode amidst the pandemic despite a large pick up in cross-border flows at the start of 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.