The MUFG Global Markets Podcast

Following some tentative signs of easing risks in the Middle East, which have helped weaken the US dollar, Derek Halpenny, Head of Global Markets Research EMEA & International Securities, talks to Simon Mayes, Head of UK, Ireland, and Swiss FX Corporate Sales, about the potential implications for the US dollar and the financial markets. Derek also highlights some key takeaways from the numerous central bank meetings this week, including the Fed and the BoJ.

George Goncalves, Head of Macro Strategy in the Americas recapped an action-packed month full of uncertainty. Weak US fundamentals with the jobs data remaining mixed while inflation continues to come in softer suggesting that the Fed is behind the curve. George then previewed our expectations for the June FOMC meeting where he notes that the US data has deteriorated enough that the Fed may use this meeting to pivot towards a more dovish stance to gain flexibility to ease at future FOMC meetings.

Lee Hardman, Senior Currency Analyst, and Seiko Kataoka-Fisher, Director from Japanese Customer Sales for EMEA in London, discuss the recent USD sell-off ahead of next week's FOMC meeting. Will the escalating military conflict between Israel and Iran help to support the USD after hitting year-to-date lows?

Lloyd Chan, Senior Currency Analyst at MUFG Global Markets Research Asia, speaks this week about the outlook for Malaysia's economy and the ringgit amid lingering global trade uncertainties. Lloyd also highlights that Malaysia's economy is in a domestic-led investment upcycle, which could help cushion the impact of trade headwinds and support ringgit stability. 

Lee Hardman, Senior Currency Analyst, speaks with Simon Mayes, Head of UK, Ireland and Switzerland Corporate Sales (FX), to discuss FX market developments over the past week. It has been a mixed week for the USD but will the weakening trend remain place?  

George Goncalves, Head of Macro Strategy in the Americas, walks us through the latest developments in US macro and markets which was covered in the last monthly titled "The Great Whiplash". George highlights that the constant policy shifts, especially on the trade front, has led to tight trading ranges - even as we sit at local highs in both stocks and rates. Given the constant news flow challenges, and that it pays to be tactical in this environment, George previews the upcoming NFP jobs report and what to expect and what it will mean for Fed policy options ahead.

Following another week of debate over President Trump's trade tariffs, Derek Halpenny, Head of Research for Global Markets EMEA and International Securities, speaks with Shan Husain from FI FX Sales about the latest developments. They discuss legal uncertainties around reciprocal tariffs, the impact on the US dollar, and concerns about confidence in US assets. Derek also looks ahead to next week's ECB meeting and growing sentiment in Europe that the euro could strengthen its role as a global reserve currency amid doubts about the dollar.

Lloyd Chan, Senior Currency Analyst at MUFG Global Markets Research Asia, speaks this week about the outlook for the Indonesian rupiah following the 2 April US Liberation Day and last week's Bank Indonesia policy meeting. Lloyd also highlights that Indonesia's economy had slowed even before US Liberation Day and the BI could cut the policy rate one more time in Q3, possibly in September. 

Lee Hardman, Senior Currency Analyst, speaks with Abdul-Ahad, Currency Analyst, to discuss what has triggered renewed selling over the past week. Will the loss of confidence in the US and Japanese debt markets have a spillover impact on the FX market?   

Derek Halpenny, Head of Research Global Markets EMEA & International Securities talks to Jack Greenslade in FX Sales about the move in financial markets this week following the US-China trade war de-escalation announced on Monday. Derek explains why the dollar gain petered out quickly but also highlights the huge buying of UST bonds by private foreign investors. So even though foreign central banks might be selling, the buying by private investors easily offsets that. Derek and Jack also discuss the USD/Asia moves and how investors' behaviours in regard to hedging USD exposures may be changing.

Lee Hardman, Senior Currency Analyst talks to Michael Owen, Head of Global Client Desk EMEA, discuss what has been driving the FX market over the past week and helping to lift the USD. Will USD gains on the back on recent trade deal optimism and the Fed's reluctance to cut rates prove sustainable?   

George Goncalves, Head of Macro Strategy in the Americas previews our expectation ahead of the May FOMC meeting. We believe that the Fed will skip for a third time in the cycle and have a difficult time threading the needle and making everyone happy at this upcoming meeting. If the Fed elects to stay on the sidelines to wait for data to confirm that further rate cuts are needed, they might realize that they will come too late. If the Fed messaging comes across as more hawkish than markets would like, it could result in risk assets to continue giving back recent returns.

After a stronger than expected US jobs report and increased speculation of an easing in trade tensions, Derek Halpenny. Head of Research Global Markets EMEA and International Securities sits down with Simon Mayes, Head of UK, Ireland & Swiss Corporate FX Sales to discuss financial market conditions and the renewed depreciation of the US dollar. Derek also looks to next week and discusses the FOMC and BoE meetings and the fallout for the yen following the BoJ meeting this week.

The US administration has signified a strong preference for lower oil prices to support the American consumer. In our 2025 energy outlook (see here), we believed loose supply-demand fundamentals could help achieve this goal even without any action from the administration. The dent to global demand that the imposition of US tariffs will impose has reinforced our bearish oil price thesis with the trajectory unambiguously to the downside. Forecasting oil market conditions is challenging under the best of times, but at the current juncture, all estimates come with larger-than-usual uncertainty intervals. In this context, and given the fat tail risks that exist in today's environment, Ehsan Khoman, Head of Research – Commodities, ESG and Emerging Markets (EMEA), discusses MUFG's parameterisation of scenarios for global oil markets to frame how low oil price can go.  

George Goncalves, Head of Macro Strategy in the Americas recaps key market themes that have played out in markets during the epic month of April, drawing parallels to other historical market events. Additionally, he touches on fears of dedollarization, weak soft data, the question of when this will finally filter through to the hard data, and how the Fed could deal with slowing economic growth. To cap it off he notes what else to look out for as month end approaches with key labor data, macro data, and corporate earnings continue to roll in and the risks to markets.

Lee Hardman, Senior Currency Analyst talks to Michael Owen, Head of Global Client Desk EMEA, about the volatile price action for USD/JPY over the past week. Will the BoJ's upcoming policy meeting derail the current downward trend for USD/JPY? Disclaimer: www.mufgresearch.com (PDF)

  The first half of this decade has witnessed a significant acceleration in green capex – investment that advances UN Sustainable Development Goals (SDGs). Yet, a combination of tariff-driven uncertainties, focus on corporate returns and interest rate headwinds is set to see a slower pace of growth in the back half of this decade.   As corporates re-evaluate the risk/returns on investments, Ehsan Khoman, Head of Research – Commodities, ESG and Emerging Markets (EMEA), believes that uncertainties in today's operating environment will deepen the differentiation of green capex verticals based on cost curve positioning, elasticity to higher prices/costs as well as consumer appetite. Listen into this week's podcast, where Ehsan discusses potential US tariff implications on the outlook for key green capex verticals.

Recent market volatility, the macro environment, changes to corporate sustainability targets and policy uncertainty have challenged sustainability themes globally.  Ehsan Khoman, Head of Research – Commodities, ESG and Emerging Markets (EMEA), discusses what corporates could prioritise from a sustainability lens amid an increasingly deglobalised operating environment. He believes that (1) improving consumer efficiency to reduce consumption intensity and mitigate inflationary pressures as well as (2) the ability to maintain reliable power demand amid aging infrastructure and more extreme weather events by recognising potential downside risks from slowing global growth, could collectively be “efficiency” and “reliability” verticals that can support corporate resiliency in navigating today's volatility.

This week's Global Markets podcast takes place against a backdrop of financial market turmoil with signs of a building crisis of confidence in US assets. Derek Halpenny, Head of Research Global Markets EMEA & International Securities talks to Chris Jakubowski Head of FI FX Sales about what needs to happen to halt the slide in confidence. There are certain actions that would help but none seems that likely. Derek and Chris also discuss the prospects for JPY and the BoJ's stance in the midst of increased financial market turmoil. Disclaimer: www.mufgresearch.com (PDF)

 US President Trump's “Liberation Day” announcement of (1) a 10% baseline tariff effective from 5 April, along with (2) a set of higher, country-specific “reciprocal” rates on 57 trade partners with which the US has trade deficits from 9 April, has jolted global markets. Chinese policymakers have promptly responded with a broad set of countermeasures that mirrors the US move. Global financial markets have been in turmoil post the “Liberation Day” announcements with stock markets shedding trillions of dollars, credit spreads widening, oil prices tumbling and currencies gyrating wildly. From a sustainability lens, if tariffs are sustained, they will raise the stakes for the survival or repeal of advanced manufacturing credits in the US Inflation Reduction Act (IRA) – the largest climate legislation in US history. Ehsan Khoman, Head of Research – Commodities, ESG and Emerging Markets (EMEA), discusses the reverberations of these tariff increases across the sustainability complex, wherein he believes that batteries and battery energy storage systems (BESS) are particularly exposed to the new tariffs given the limits to domestic US manufacturing.

George Goncalves, Head of Macro Strategy in the Americas, walks us through the latest tariff developments and potential implications for the economy and markets. As a reminder, a palooza is informally viewed as a large frenzied event, thus it's apt to call this latest version a “tariff-palooza” as markets got jolted by the larger than expected and broad-based announcement on “Liberation Day.” Although the approach the administration has taken a tougher stance on fiscal spending and trade negotiations, it is directionally in line with our 2025 Outlook, given all the uncertainty that this latest tariff rounds have had on both investors and corporate America, unless the tariffs are not fully binding and or get negotiated away quickly, the recent volatility has raised our recession risks.  

Lee Hardman, Senior Currency Analyst, and Jack Greenslade of UK, Ireland, Switzerland and Middle East Corporate Sales, discuss the impact of President Trump's tariff plans for the FX market. Will an escalating trade war lead to further strength for safe haven currencies such as the yen? Disclaimer: www.mufgresearch.com (PDF)

The US dollar is weaker this week against most G10 currencies ahead of the key reciprocal tariff announcement on 2nd April. Derek Halpenny, Head of Research Global Markets EMEA & International Securities talks to Shan Husain Institutional FX Sales EMEA about how the markets are positioned ahead of the announcement and what we can expect in the days and weeks following. Derek suggests financial markets are possibly overly optimistic about the potential impact.   Disclaimer: www.mufgresearch.com (PDF)

US President Trump has threatened to impose “secondary tariffs” at a rate of 25% on countries that purchase crude oil from Venezuela, aiming to stymie its oil trade with other nations. The move is seen as a novel dimension in the new US administrations policy toolkit to use as leverage in achieving its foreign and domestic policy goals. Ehsan Khoman, Head of Research – Commodities, ESG and Emerging Markets (EMEA), discusses the reverberations of these “secondary tariffs” and offers reasons to believe why the gravitational tilt for oil prices remains to the downside despite the risks of a removal of crude barrels from global oil markets.

Lee Hardman, Senior Currency Analyst, and Seiko Kataoka-Fisher, Director from Japanese Customer Sales for EMEA in London, discuss the latest policy updates from the Fed, BoJ, BoE. How is heightened uncertainty related to President Trump's policy plans impacting central bank communication? Disclaimer: www.mufgresearch.com (PDF)

Uncertainty about US policy, especially trade policy, has contributed to substantial rises in inflation uncertainty and in the University of Michigan's measure of long-term US household inflation expectations, which has risen to the highest since 1995. Ehsan Khoman, Head of Research – Commodities, ESG and Emerging Markets (EMEA), believes that as tariff threats, inflation expectations and inflation uncertainty rise further, commodities act as a critical inflation hedge as physical assets historically deliver strong real returns when inflation rises, while equity and bond real returns tend to be negative.

George Goncalves, Head of Macro Strategy in the Americas, recaps what has been driving market volatility as well as where he thinks broader markets may go in the short-run. Additionally, he goes over what to expect at the March FOMC meeting where the Fed likely conveys a neutral message as they are "not in a hurry" to cut rates or get worried about the recent market vol and financial conditions tightening.

The dollar is ending this week on a weaker footing and Derek Halpenny, Head of Research Global Markets EMEA & International Securities talks to Simon Mayes Head of UK, Ireland & Switzerland FX Corporate Sales about the drivers in the FX markets and looks ahead to the numerous central bank meetings taking place on Wednesday and Thursday. Derek hones in on the BoJ and the yen and highlights the key focuses of the BoJ meeting for the markets and how JGB yields are an important influence of JPY direction. Disclaimer: www.mufgresearch.com (PDF)

Lee Hardman, Senior Currency Analyst, and Shan Husain, Institutional FX Sales discuss the impact of the significant policy shift taking place in Germany. Why has the USD failed to strengthen in response to President Trump's tariffs this week? Disclaimer: www.mufgresearch.com (PDF)

With China's annual Two Sessions meetings underway, Dr. Lin Li, Head of Global Markets Research for Asia, delves into the key takeaways from the Work Report by the National People's Congress for 2025. 

Commodities are front and centre in President Trump's trade and foreign policies as his administration pursues US dominance, spurred by competition with China. This paradigm envisions affordable US energy prices, higher US output in the old economy (such as, crude oil and manufacturing) and new economy (such as, power, metals, and AI). In this week's podcast, Ehsan Khoman, Head of Research – Commodities, ESG and Emerging Markets (EMEA), discusses the policy shifts and offers motivations as to why the elevated level of uncertainty reinforces the diversifying role commodities continue to play in portfolio allocation this year.

George Goncalves, Head of Macro Strategy in the Americas, recaps our most recent monthly titled – The Ides of March where he highlights analysis on the Senate and House's Budget plans and risks to the fiscal outlook in the budget process. Additionally, George summarizes what to look out for in February's payroll number.  

The US dollar remains weaker on a year-to-date basis on President Trump's more pragmatic approach to implementing trade tariffs. But that could be about to change. Derek Halpenny, Head of Research Global Markets EMEA & International Securities talks to Seiko Kataoka-Fisher Head of Japanese Customer FX Sales about the risks for the US dollar going forward given the imminent threat of tariffs on Canada and Mexico next week and the numerous other tariff plans ahead. Derek also discusses the outlook for the yen on the back of more hawkish rhetoric from the BoJ and the potential for further gains ahead. Disclaimer: www.mufgresearch.com (PDF)

Conventional wisdom suggests tariffs leads to demand destruction, which in-turn could ease environmental impacts (through lower carbon intensity that lower GDP growth brings on a first order basis). Having said that, should there be a re-allocation of production, onshore or to other trade partners – due to the forces of deglobalisation – then the energy and/or electricity mix of the alternative country's matter. In this week's podcast, Ehsan Khoman, Head of Research – Commodities, ESG and Emerging Markets (EMEA), offers a list of considerations for corporates and investors looking to assess sustainability impacts of recent tariff developments.

Lee Hardman, Senior Currency Analyst, and Simon Mayes, Head of UK, Ireland and Switzerland Corporate Sales, discuss why USD/JPY has fallen back below the 150.00 level. Will the current trends of a stronger JPY and weaker USD continue?

The AI Action Summit took place in Paris between 10-11 February that led to a host of significant announcements supporting the rise of datacentres and AI in Europe. Discussions at the summit, centred on three critical areas: (i) accelerating global AI development; (ii) managing the AI transition while protecting individual freedoms; and (iii) aligning AI with humanist values. Ehsan Khoman, Head of Research – Commodities, ESG and Emerging Markets (EMEA), delves into the specifics and offers implications of what corporates and investors can tangibly expect to see transpire from the summit.

Lee Hardman, Senior Currency Analyst in London, and Michael Wan, Senior Currency Analyst in Singapore, discuss what has been driving FX markets in Asia and Europe at the start of this year. Topics of discussion include: i) the responses from Asia and Europe to Trump's tariff policies and ii) the upcoming German elections and potential for Ukraine ceasefire agreement. Disclaimer: www.mufgresearch.com (PDF)

US President Trump signed executive orders imposing 25% tariffs on all steel and aluminium imports into America from 4 March, granting no exemptions. On the condition of no significant exemptions, Ehsan Khoman, Head of Research – Commodities, ESG and Emerging Markets (EMEA), expects the aluminium and steel tariffs to be largely passed through to US (and less global) prices. Listen to this week's podcast wherein Ehsan contextualises what is at stake and whether copper tariffs may be the next watchpoint for global markets.

George Goncalves, Head of Macro Strategy in the Americas, recaps last week's labor data where we received several important revisions to data and models. Additionally, George highlights what to look out for January's CPI report and concludes with what other potential catalysts to watch for.

Lee Hardman, Senior Currency Analyst, and Abdul-Ahad Lockhart, Currency Analyst, discuss how President Trump's decisions on trade policy have been impacting the FX market this week. Did the BoE's latest policy update change their outlook for the pound? Disclaimer: www.mufgresearch.com (PDF)

In this week's special podcast edition, Ehsan Khoman, Head of ESG, Commodities and Emerging Markets Research, is joined by Amanda Kavanaugh, Head of ESG Business Coordination and Strategy, to discuss the key takeaways from MUFG's inaugural 2025 ESG event, titled, “Navigating the transition for a sustainable future”.

George Goncalves, Head of Macro Strategy in the Americas, summarizes and recaps our monthly titled Risk-Off Flashpoint (Now in Focus), where in our special topic cover labor market dynamics and demographics. Furthermore, George discusses what to expect from this all-important NFP number on Friday. We conclude with what to look out for before the March Fed meeting and what will be influential for US fixed income.

This week draws to a close with a 25% trade tariff set to be implemented on Canada and Mexico. Derek Halpenny, Head of Research Global Markets EMEA & International Securities talks to Jack Greenslade, UK, Ireland, Swiss & ME FX Sales, about the FX implications of Trump going ahead with these tariffs over the weekend. Derek also covers the FX implications of the Fed and ECB meeting this week, looks ahead to the BoE policy meeting next week and discusses the strong performance of the yen and what lies ahead. Disclaimer: www.mufgresearch.com (PDF)

The European Commission unveiled its “Competitiveness Compass” on 29 January – the Commission's new economic doctrine, aimed at making regulations simpler, lighter and faster. The Compass lends on three dimensions of Mario Draghi's “the future of European competitiveness” report in September 2024 – (1) closing the innovation gap, (2) decarbonisation, and (3) increasing energy security, and offers five enablers, (1) the simplification of the regulatory environment, (2) the merits of the Single Market, (3) financing through a Savings and Investments Union, (4) promoting skills and jobs, and (5) strengthening coordination on policy execution. In this week's podcast, Ehsan Khoman, Head of Research – Commodities, ESG and Emerging Markets (EMEA), contextualises the sustainability reverberations of this blueprint “Competitiveness Compass” report and what corporates and investors should anticipate as key watchpoints in the coming months ahead.

George Goncalves, Head of Macro Strategy in the Americas, discusses our outlook for the Fed's first meeting of 2025, in which we believe the Committee should be “defiantly data dependent” and keep rates on hold. We focus on our base case that Powell will deliver a neutral message, but also discuss risks around that view. We conclude with our expectations for how markets will trade in the coming weeks.

Lee Hardman, Senior Currency Analyst, and James Roulston, FX Institutional Sales, discuss the outlook for the USD at the start of Trump's second term. Will the Fed's policy update trigger another leg lower for the USD in the week ahead? Disclaimer: www.mufgresearch.com (PDF)

At the end of the week Chris Jakubowski, Head of Hedge Fund FX Sales sits down with Derek Halpenny, Head of Research Global Markets EMEA & International Securities to discuss the key events in the week ahead and how the FX markets may respond. There are high expectations of Trump announcing trade tariffs under Executive Order along with many other policy announcements that could prompt further US dollar gains. How much further can the dollar advance from here? Are the Gilt market concerns overblown? And will the BoJ deliver another hike as it has suggested this week is likely? Disclaimer: www.mufgresearch.com (PDF)

If 2024 was a waiting game for elections, Ehsan Khoman, Head of Research – Commodities, ESG and Emerging Markets (EMEA), believes 2025 will be a period of climate action reassessment by corporates and investors in the face of uncertain and evolving political, economic and social realities. Ehsan believes major sustainable investing themes for 2025 will include biodiversity, supply chains and corporate lobbying, with AI considerations set to cut across all 3 ESG pillars.

Lee Hardman, Senior Currency Analyst, and Simon Mayes, Head of UK, Ireland and Switzerland, Corporate Sales, discuss what has been behind in the sharp sell-off in global bond markets over the past week. How has the FX market been impacted by rising government borrowing costs? Disclaimer: www.mufgresearch.com (PDF)

The external backdrop for EM has shifted abruptly – the soft-landing pro-risk environment and pricing of non-recessionary Fed cuts has given way to concerns around tariff risks (and the likelihood of retaliatory action), higher-for-longer US rates and a strong US dollar. This sets the stage for a challenging EM backdrop in 2025. In this week's podcast, Ehsan Khoman, Head of Research – Commodities, ESG and Emerging Markets (EMEA), discusses MUFG's emerging markets 2025 outlook which suggests that choppy external headwinds in 2025 puts the onus on EMs to stand on their own feet. Those that rely on solid fundamentals and domestic policy support to deliver performance, are set to lead. Disclaimer: www.mufgresearch.com (PDF)

George Goncalves, Head of Macro Strategy in the Americas, summarizes our key themes that will impact the US macro and market landscape in 2025. We focus on what are the potential US economic scenarios ahead, how to think about “Trump 2.0” and what will be the role of the Fed in 2025.  We conclude by reviewing our base-case versus bull/bear scenarios for US fixed income.