MUFG issues capital markets outlook for 2023–‘The New Macro Supercycle’

  • The most telegraphed world series of light rolling retreats is expected in years
  • 2024 is seen as the likely timing for a broad-based, sustainable recovery
  • Credit markets provide a ‘tale of two cities’

NEW YORK, January 23, 2023 /PRNewswire/ — Mitsubishi UFJ Financial Group’s (MUFG’s) (NYSE: MUFG) Capital Markets Strategy team released its 2023 outlook titled “The New Macro Supercycle” providing a forward-looking view of the global economy, monetary policy and markets in the next year. 12 months—and highlighting common themes that will drive the global economic environment over the next decade.

“The ‘Great Moderation’ of low inflation and volatility of the last 40 years is over,” says Tom Joyce, head of Capital Markets Strategy. “In the wake of the ‘multiple crisis’ of 2022 arising from concurrent geopolitical, energy and economic shocks, we have ushered in a period of greater clarity for economies and markets.”

Joyce says that while the previous year was challenging, the 2023 downturn in asset prices is likely to be of less concern and fear than unexpected inflation and US Federal Reserve tightening in 2022. In addition, he says , we start 2023 with a positive surprise. across the world’s three largest economies: US inflation declining rapidly, reopening i China and lower energy prices from warm winter weather i Europe.

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Shops take away a key

The main views of the Capital Markets Strategy team relate to five of the following areas:

  1. The new “macro supercycle”: Joyce and his team highlight the many new pervasive themes that will drive the global economy and global markets over the next decade including a shift to quantitative tightening, persistently higher inflation, greater instability, economic cycles shorter, tighter scrutiny of investors, long-term supply constraints. commodification, fragmented globalization, structural deficiencies in labor markets, and an eastward shift in the center of gravity of the global economy.
  2. The global economy: The team expects the most telegraphed series of mild rolling recessions in decades, and sees 2024 as the most likely time for a sustained, broad-based global recovery.
  3. Global monetary policy and US public policy: In the team’s view, the historic monetary tightening in 2022 will be felt more in 2023, since monetary policy operates with a lag of 12-18 months. I the United Stateswith a divided Congress and narrow majorities in both houses, the team expects very limited fiscal support and more complexity in mainstream legislation in 2023.
  4. The credit markets: The team foresees a “tale of two cities,” noting that, on the one hand, investors enter the new year with a clean slate to put money to work in strong corporate balance sheets that offer more attractive yields than at any time since global finance. crisis of 2008-2009. However, the team also notes that as the year progresses, earnings deceleration and margin compression will put pressure on a changing credit cycle. Against this background, the team believes that pre-funding strategies are particularly important in 2023.
  5. The global financial markets: The team reviews the research of MUFG’s US Macro Strategy team with views for the year ahead including bullish US Treasury yields, bearish credit spreads, a moderate US dollar, and different paths for commodities as a result of mixed pressures — up and down — on different commodity groups by region, such as natural gas i the United States and Europe.
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The full report can be accessed here or by using the following link:
https://www.mufgamericas.com/sites/default/files/document/2023-01/new-macro-supercycle-final.pdf

Contact press:

Assaf Kedem
D: +1 212-782-4926
M: +1 917-685-4388
[email protected]

About MUFG and MUFG America
Mitsubishi UFJ Financial Group, Inc. (MUFG) is one of the largest financial groups in the world. Headquarters i Tokyo and with over 360 years of history, MUFG has a global network of approximately 2,100 locations in more than 50 countries. MUFG has nearly 160,000 employees and offers services including commercial banking, trust banking, securities, credit cards, consumer finance, asset management, and leasing. The Group aims to “be the most trusted financial group in the world” through close collaboration among our operating companies and responding flexibly to all the financial needs of our customers, serving society, and fostering shared growth and sustainable for a better world. MUFG shares trade on the Tokyo, Nagoyaand New York stock exchanges.

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MUFG’s American operations, including its US offices, Latin Americaand Canada, which is mainly organized under MUFG Bank, Ltd. and subsidiaries, and are focused on Global Corporate and Investment Banking, Japanese Corporate Banking, and Global Markets. MUFG is one of America’s largest foreign banking organizations. For locations, banking capabilities and services, career opportunities, and more, visit www.mufgamericas.com.

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