MUFG: 2022 Signals ‘Regime Change’ for Markets and Corporates
JAN 25, 2022 - 6:32 am
The capital markets strategy team at Mitsubishi UFJ Financial Group released its annual outlook for C-suite executives, analyzing how corporate strategy is transitioning in 2022 amid rising interest rates, a pivot to tightening monetary and fiscal policy and the prospect of higher volatility.
“2022 will be a time of ‘regime change’ for the global economy, policy and markets, as we have accelerated rapidly into a mid-cycle recovery characterized by decelerating growth, policy tightening and higher volatility,” Tom Joyce, head of capital markets strategy at MUFG, along with Hailey Orr, director at MUFG, and Stephanie Kendal, an associate at MUFG, wrote. “Visibility remains low for accurately forecasting economies and markets.”
The authors noted that, against this backdrop of global rebalancing, corporates have embarked on a “feverish pace” of capital-expenditure investment and strategic activity in response to a rapidly evolving landscape that includes elevated government regulation, vertical integration of supply chains and massive investments in technology, innovation and sustainability.
MUFG’s 2022 global markets and economic outlook spans the following areas:
Global economy rebalancing: An assessment of global growth, policy tightening, supply chain dislocations and broadening inflation, with a view toward moderation in late 2022 and early 2023
Regime change in markets: An analysis of the structural transition underway in the global economy and markets, including the impact of technology innovation and the “greening” of the financial system
Strategic positioning from strength: A review of the strategic adjustments that corporates have made during the COVID-19 pandemic to fortify their balance sheets for a new period of elevated investment and strategic activity
Investing in a new world: A spotlight on the accelerating capex cycle that is underway, historic M&A volumes, technology’s transformative impact on business strategy and the importance of keeping pace with environmental, social and governance (ESG) factors
Resilient credit markets: A review of the U.S. dollar-denominated credit market, which, according to MUFG, is a deep, liquid market offering more continuity than change (especially as compared with other markets and economies globally during the pandemic), and whose technical and fundamental drivers remain strong
A new era of big government: An assessment of “regulatory activism” (which has increased globally over the last decade following massive government rescue efforts during the financial crisis of 2008-2009 and the COVID-19 pandemic) and the role of government in “policy de-globalization”, infrastructure spending, climate transition and anti-trust merger scrutiny
Like this story? Begin each business day with news you need to know! Register now for FREE Daily E-News Broadcast and start YOUR day informed!
There’s much talk about the need for innovation and focusing on well-being in our teams. But what does that look like day-to-day? What if we bring those two ideas together and focus on the human side to create safety to... read more
Dr. Arin N. Reeves, president and managing director of Nextions, a work culture advisory firm, found herself transitioning from practicing law to focusing on diversity, equity and inclusion in the workplace more than 25 years ago, but she says the... read more