Global Markets Podcasts

Please note this podcast was recorded prior to Joe Biden announcing Kamala Harris as his VP.

The 2020 election is less than 90 days away, and voting will begin in some states as early as next month. With the continued impact of the coronavirus, former VP Biden has maintained a lead over President Trump, but as the general election campaigning heats up, a number of upcoming events could impact the dynamic.

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. 

USDJPY has recovered to the 106 level so far in August. However, DXY shows that US dollar weakening trends remain intact. Globally, equity prices are firm and market sentiment is unlikely to drive JPY strengthening, but USDJPY could still fall because of seasonal cash repatriation factors. Japanese investors’, as well as Japanese companies’, flows for JGBs and foreign govies tend to be weak ahead of the Obon summer holidays.

In this episode, Takahiro Sekido, Chief Japan Strategist of Global Markets Research, MUFG Bank Tokyo discusses cross border flows, tight JPY swap and basis swap spreads, and updates on his view of the Yen, JPY rates, and JPY cross-currency basis.

Last week’s Bank of England policy meeting was positive for the pound, decreasing downside risks as confirmation was given that negative interest rates won’t be introduced for now. While the BoE continued to display a relatively optimistic outlook for the UK economy, Lee Hardman, Currency Analyst at MUFG considers whether this could be put at risk as the UK economy looks set to struggle in the coming months.

As announcements about job cuts linked to COVID-19 continue to grow, along with the heightened risk of a disruptive Brexit outcome, Lee expects further policy easing will be needed in the coming months to ensure stability. Elsewhere, strains are building in emerging markets but will they help to support the US dollar more broadly? Click below to listen now.

Major Japanese companies began announcing Q2 earnings results last week. Earnings of major companies reflect the uncertainties of the COVID-19 pandemic. Japanese companies need to secure USD funding with JPY basis swaps to maintain their global business portfolios amidst uncertain business conditions. Despite all this chaos global stock and credit markets remain calm as central banks in key economies continue to buy government bonds and credit assets and supply USD funds. Will this continue?

In this episode, Takahiro Sekido, Chief Japan Strategist of Global Markets Research, MUFG Bank Tokyo discusses the increase in fiscal receipts from MoF issuance in the context of BoJ asset purchase and USD fund-supply operation announcements. He also updates his view on the Yen, JPY rates and JPY cross-currency basis.

Uncertainty looms for both USD and GBP as both countries reckon with unpredictable forces. Relentless selling saw the dollar have a terrible month in July, and now concerns that President Trump may call into question the legitimacy of votes in the U.S. election and risks of the Fed failing to pass another fiscal stimulus package are further undermining the currency.

Meanwhile the pound has seen surprising strength over the past month, but with a Bank of England meeting on Thursday, local lockdowns and COVID-19 second wave fears, can this trend continue? Lee Hardman, currency analyst, gives his forecast.