Fixed Income and Currency Strategist

Gautam Jain, PhD, CFA

FX & Rates

US long-end yields may be headed for a summer lull. If so, it could set up a period where EM rates make up for some of their previous underperformance. We identify the countries that stand to benefit if this scenario plays out.Separately, the attached file is a snapshot of the EM currency market in which we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to an EM currency index.

US long-end yields may be headed for a summer lull. If so, it could set up a period where EM rates make up for some of their previous underperformance. We identify the countries that stand to benefit if this scenario plays out.Separately, the attached file is a snapshot of the EM currency market in which we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to an EM currency index.

Rates 10y Dashboard: Which Countries Stand to Benefit as EM Rates Volatility Falls?

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

US Treasury (10 Yr Generic) / Technical Analysis

Market dynamics remain largely bullish and we continue to see signs of improving risk appetites. As a result, we are on the verge of shifting to an outright bullish stance. High yield spreads hit new 2021 narrows on Friday as they moved to 14-year lows. Additionally, defensive areas including Staples (XLP), Utilities (XLU), and Gold (GLD) are breaking to new 2021 RS lows.

Market dynamics remain largely bullish and we continue to see signs of improving risk appetites. As a result, we are on the verge of shifting to an outright bullish stance. High yield spreads hit new 2021 narrows on Friday as they moved to 14-year lows. Additionally, defensive areas including Staples (XLP), Utilities (XLU), and Gold (GLD) are breaking to new 2021 RS lows.

U.S. Equity Strategy: Downgrading Consumer Staples To Underweight; Watching 10-Year Yield Closely

We continue to see a mixed market environment, but we remain constructive overall considering market dynamics remain largely positive (high yield spreads and relative strength for defensives sending risk-on signals, etc.). We explain our outlook below.

We continue to see a mixed market environment, but we remain constructive overall considering market dynamics remain largely positive (high yield spreads and relative strength for defensives sending risk-on signals, etc.). We explain our outlook below.

U.S. Equity Strategy: S&P 500 Still Bullish, Holding Above Support

Since the hawkish FOMC meeting last week, the US rates curve has flattened. In this note, we address the question: if the US curve continues to flatten, will it take EM with it? Our short answer is yes, but with a couple of caveats.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.

Since the hawkish FOMC meeting last week, the US rates curve has flattened. In this note, we address the question: if the US curve continues to flatten, will it take EM with it? Our short answer is yes, but with a couple of caveats.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: Can US Curve Flattening Pull EM with It?

While our base case is not one of a repeat of the reflationary scare from earlier this year, we need to be cognizant of the risk with the Fed beginning to tiptoe towards tapering. As such, similar to an earlier analysis on currencies, we evaluate which EM rates are the most vulnerable if there is another steep correction in US Treasuries.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.

While our base case is not one of a repeat of the reflationary scare from earlier this year, we need to be cognizant of the risk with the Fed beginning to tiptoe towards tapering. As such, similar to an earlier analysis on currencies, we evaluate which EM rates are the most vulnerable if there is another steep correction in US Treasuries.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: Which EM Rates Are Most Vulnerable to Rising US Rates?

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US Treasury (10 Yr Generic) (GT10 GOVT)

Rates 10y Dashboard: Which Countries Stand to Benefit as EM Rates Volatility Falls?

With US long-end yields likely headed for a summer lull, EM rates could make up for some of their previous underperformance. We identify the...

Gautam Jain, PhD, CFA

U.S. Equity Strategy: Downgrading Consumer Staples To Underweight; Watching 10-Year Yield Closely

Market dynamics remain largely bullish and we continue to see signs of improving risk appetites. As a result, we are on the verge of shifting to an...

Vermilion Research

U.S. Equity Strategy: S&P 500 Still Bullish, Holding Above Support

We continue to see a mixed market environment, but we remain constructive overall considering market dynamics remain largely positive. We explain...

Vermilion Research

Rates 10y Dashboard: Can US Curve Flattening Pull EM with It?

In this note, we address the question: if the US curve continues to flatten, as it has since the FOMC meeting last week, will it take EM with it?...

Gautam Jain, PhD, CFA

Rates 10y Dashboard: Which EM Rates Are Most Vulnerable to Rising US Rates?

Similar to an earlier analysis on currencies, we evaluate which EM rates are the most vulnerable if the risk scenario of another correction in US...

Gautam Jain, PhD, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)