Fixed Income and Currency Strategist

Gautam Jain, PhD, CFA

FX & Rates

Following the surprise rate hike by Mexico's central bank last week, the rates curve flattened dramatically. We have made the case before that the central bank should raise rates earlier than market expectations and the central bank's hawkish turn supports our recommendation to buy the Mexican peso against the Canadian dollar.Separately, the attached file is a snapshot of the EM 10y rates market in which we seek to identify the leaders and laggards among countries by comparing the performance of each to its history as well as to other countries based on their respective betas to an EM rates index.

Following the surprise rate hike by Mexico's central bank last week, the rates curve flattened dramatically. We have made the case before that the central bank should raise rates earlier than market expectations and the central bank's hawkish turn supports our recommendation to buy the Mexican peso against the Canadian dollar.Separately, the attached file is a snapshot of the EM 10y rates market in which we seek to identify the leaders and laggards among countries by comparing the performance of each to its history as well as to other countries based on their respective betas to an EM rates index.

Rates 10y Dashboard: Mexico’s Curve Flattens Following the Rate Hike Surprise

In this note, we point out the best and worst performers among 10y rates in EM countries and connect their performance with their volatility-adjusted yields, allowing us to identify those that can perform well going forward.Separately, the attached file is a snapshot of the EM 10y rates market in which we seek to identify the leaders and laggards among countries by comparing the performance of each to its history as well as to other countries based on their respective betas to an EM rates index.

In this note, we point out the best and worst performers among 10y rates in EM countries and connect their performance with their volatility-adjusted yields, allowing us to identify those that can perform well going forward.Separately, the attached file is a snapshot of the EM 10y rates market in which we seek to identify the leaders and laggards among countries by comparing the performance of each to its history as well as to other countries based on their respective betas to an EM rates index.

Rates 10y Dashboard: YTD Leaders and Laggards Among EM 10y Rates

With the curve in Mexico bear flattening, we use the opportunity to recommend taking profits on two of our rates trades recommendations: a Mexico 5s10s flattener with a paying bias and receiving Colombia 5y against paying Mexico 5y rate.

With the curve in Mexico bear flattening, we use the opportunity to recommend taking profits on two of our rates trades recommendations: a Mexico 5s10s flattener with a paying bias and receiving Colombia 5y against paying Mexico 5y rate.

Alpha Bites: Take Profits on Two Rates Recommendations

In this note, we discuss the Mexican central bank's most recent monetary policy meeting where it kept policy rates steady while reiterating that it expects inflation to converge to the target next year. We continue to expect the central bank to raise rates this year and emphasize our trade recommendations meant to capture that view.Separately, the attached file is a snapshot of the EM 10y rates market in which we seek to identify the leaders and laggards among countries by comparing the performance of each to its history as well as to other countries based on their respective betas to an EM rates index.

In this note, we discuss the Mexican central bank's most recent monetary policy meeting where it kept policy rates steady while reiterating that it expects inflation to converge to the target next year. We continue to expect the central bank to raise rates this year and emphasize our trade recommendations meant to capture that view.Separately, the attached file is a snapshot of the EM 10y rates market in which we seek to identify the leaders and laggards among countries by comparing the performance of each to its history as well as to other countries based on their respective betas to an EM rates index.

Rates 10y Dashboard: Mexico – Delaying the Inevitable Monetary Tightening

In this week’s Alpha Bites, we recommend receiving Colombia 5y against paying Mexico 5y rate. Colombian assets have sold off as the government had to withdraw its fiscal consolidation bill on the back of deadly street protests, leading to credit downgrade worries. The downgrade is now reflected in the prices, at least partially, and the rates curve has considerable rate hikes also priced in. In contrast, rates in Mexico are at a greater risk of moving higher in our view especially following the recent high inflation readings and expectations in surveys.

In this week’s Alpha Bites, we recommend receiving Colombia 5y against paying Mexico 5y rate. Colombian assets have sold off as the government had to withdraw its fiscal consolidation bill on the back of deadly street protests, leading to credit downgrade worries. The downgrade is now reflected in the prices, at least partially, and the rates curve has considerable rate hikes also priced in. In contrast, rates in Mexico are at a greater risk of moving higher in our view especially following the recent high inflation readings and expectations in surveys.

Alpha Bites: Receive Colombia 5y Versus Pay Mexico 5y Rate

Mexico

A vanila interest rate swap us an agreement between two counterparties to exchange cashflows (fixed vs floating) in the same currency. This agreement is often used by counterparties to change their fixed cashflows to floating or vice versa. The payments are made during the life of the swap in the frequency that is pre-established by the counterparties.

Price Gauge
52-week Range	0.00 - 0.00
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MXN 5Y (MPSW5E CURNCY)

Rates 10y Dashboard: Mexico’s Curve Flattens Following the Rate Hike Surprise

Last week's hawkish surprise by Mexico's central bank supports our recommendation to buy the Mexican peso against the Canadian dollar.

Gautam Jain, PhD, CFA

Rates 10y Dashboard: YTD Leaders and Laggards Among EM 10y Rates

We connect the best and worst performers among 10y rates in EM countries with their volatility-adjusted yields, allowing us to identify those that...

Gautam Jain, PhD, CFA

Alpha Bites: Take Profits on Two Rates Recommendations

With Mexico's curve bear flattening, we use the opportunity to recommend taking profits on two of our rates trades recommendations: Mexico 5s10s...

Gautam Jain, PhD, CFA

Rates 10y Dashboard: Mexico – Delaying the Inevitable Monetary Tightening

While Mexico's central bank held rates steady at the meeting last week, we continue to expect it to raise rates this year and emphasize our trade...

Gautam Jain, PhD, CFA

Alpha Bites: Receive Colombia 5y Versus Pay Mexico 5y Rate

We recommend receiving Colombia 5y against paying Mexico 5y rate as Colombia is reflecting the downgrade risk and has significantly more rate hikes...

Gautam Jain, PhD, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)