MUFG Releases Its Capital Markets Outlook for 2023 – ‘The New Macro Supercycle’

  • It predicts the largest global series of moderate and variable recessions in decades
  • 2024 appears to be the likely timing for a broad and sustainable recovery
  • A Tale of Two Cities in the Credit Markets

New YorkAnd January 23, 2023 /PRNewswire/ — Mitsubishi UFJ Financial Group’s (NYSE: MUFG) Capital Markets Strategy Team has released its 2023 Outlook titled “The Macro Supercycle” that provides a forward-looking view of the global economy, monetary policy, and markets in the 12 months ahead — and highlights prevailing themes that Driving the economic environment around the world in the next decade.

“The ‘great moderation’ of low inflation and volatility over the past 40 years is over,” he says. Tom JoyceHead of Capital Markets Strategy. “In the aftermath of the ‘multi-crisis’ of 2022 caused by simultaneous geopolitical, energy and economic shocks, we have entered a more clearly defined period for economies and markets.

Joyce adds that although the previous year was challenging, recession fears in 2023 are likely to be less of a concern and reflect more heavily on asset prices than unexpected inflation and US Federal Reserve tightening in 2022. Additionally, As he says, we start 2023 with positive surprises across the world’s three largest economies: a rapid drop in inflation in the United States, a reopening in China Low energy prices from the warm winter weather in Europe.

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Key observations of the Capital Markets Strategy team cover five of the following areas:

  1. The new “macro cycle”: Joyce and his team highlight dozens of pervasive new themes driving the global economy and markets in the next decade that include a transition to quantitative tightening, persistently high inflation, greater instability, shorter economic cycles, tighter investor scrutiny, and long-term supply constraints for commodities, and fragmented globalization, structural deficits in labor markets, and the eastward shift in the center of gravity of the global economy.
  2. International Economy: Forecasting the largest series of mild and volatile recessions in decades, the team looks to 2024 as the most likely timing for a broad and sustained global recovery.
  3. Global Monetary Policy and US Public Policy: In the team’s view, the historic monetary tightening of 2022 will be more apparent in 2023, with monetary policy operating 12-18 months apart. in United StateWith a divided Congress and narrow majorities in both chambers, the team expects very limited fiscal support and more complexity in regular legislation in 2023.
  4. credit markets: The team anticipates A Tale of Two Cities, noting that, on the one hand, investors enter the new year with a clean track record of putting money into strong corporate balance sheets that offer more attractive returns than at any time since the global financial announcement. Crisis of 2008-2009. However, the team also notes that as the year progresses, slowing earnings and margin pressure will put pressure on the credit cycle that is poised to roll over. Against this background, the team believes that pre-funding strategies are particularly important in 2023.
  5. Global financial markets: The team summarizes the MUFG’s research on US macro strategy with views for the year ahead that include bullish US Treasury yields, bearish credit spreads, USD moderation, and divergent trajectories for commodities as a result of mixed pressures – both bullish and bearish – on different commodity groups by region. , such as natural gas United State And Europe.

The full report can be accessed here or using the following link:
https://www.mufgamericas.com/sites/default/files/document/2023-01/new-macro-supercycle-final.pdf

Media communication:

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About MUFG and MUFG Americas
Mitsubishi UFJ Financial Group, Inc. (MUFG) is one of the world’s leading financial groups. Headquartered in Tokyo With over 360 years of history, MUFG has a global network of nearly 2,100 locations in more than 50 countries. MUFG has approximately 160,000 employees and provides services that include commercial banking, credit 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 cooperation between our operating companies and responding flexibly to all financial needs of our customers, serving the community, and promoting common and sustainable growth for a better world. MUFG shares are traded in TokyoAnd NagoyaAnd New York stock exchange.

MUFG’s operations in the Americas, including its offices in the United States, Latin americaAnd CanadaIt is mainly organized under MUFG Bank, Ltd. and subsidiaries, focusing on global corporate and investment banking, Japanese corporate banking, and global markets. MUFG is one of the largest foreign banking institutions in the Americas. For locations, capabilities, banking, job opportunities, and more, visit www.mufgamericas.com.

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