Fixed Income and Currency Strategist

Gautam Jain, PhD, CFA

Gautam Jain has over 25 years of experience covering global emerging fixed income and currency markets, both as a strategist and a portfolio manager. He has worked in buy-side and sell-side firms, including The Rohatyn Group (TRG Management), Barclays Capital, and Millennium Partners. He has helped manage emerging markets local-currency and hard-currency debt funds. The assets that he covers include currencies, interest rates, sovereign credits, and related derivatives. He specializes in portfolio construction, smart-beta index creation, and asset allocation. Mr. Jain holds a Ph.D. in Operations Research from Columbia University and is a CFA charter holder.

In an Environment of Rising Rates, Colombia 10y Local Rate Is a Good Short

Flattening of Rate Curves in EM Far Exceeds the US

Rates 10y Dashboard: Colombia’s Rate Curve Should Continue to Flatten

Rates 10y Dashboard: Take Profits on Colombia 2s5s Flattener

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

FX & Rates

<ul>
<li>Colombia’s rate curve has flattened with the central bank picking up the pace of rate hikes and the long end experiencing relief following the rating downgrades earlier in the year.</li>
<li>The curve may have flattened too much with excessive rate hikes priced in and the long end vulnerable ahead of next year’s presidential election, where a leftist candidate leads.</li>
<li>I recommend a DV01-neutral 5s10s steepening trade, whose high positive carry should provide some protection if the current global flattening trend continues.</li>
</ul>


Colombia’s rate curve has flattened with the central bank picking up the pace of rate hikes and the long end experiencing relief following the rating downgrades earlier in the year.
The curve may have flattened too much with excessive rate hikes priced in and the long end vulnerable ahead of next year’s presidential election, where a leftist candidate leads.
I recommend a DV01-neutral 5s10s steepening trade, whose high positive carry should provide some protection if the current global flattening trend continues.


Alpha Bites: A DV01-Neutral 5s10s Rate Curve Steepener in Colombia

COP 10Y

Alpha Bites: A DV01-Neutral 5s10s Rate Curve Steepener in Colombia