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.

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FX & Rates

<ul>
<li>Rates in emerging countries are rising with the US, but they are outperforming. As an example, Mexico's spread to the US remains high but is off the peak.</li>
<li>Inflationary pressures, including elevated inflation expectations and breakeven, argue for a high spread. On the other hand, aggressive rate hikes are priced and real rates are already high.</li>
<li>With inflation likely to peak soon, I find rates in Mexico high enough to receive and have a trade recommendation accordingly, even though there are arguments on both sides.</li>
</ul>


Rates in emerging countries are rising with the US, but they are outperforming. As an example, Mexico's spread to the US remains high but is off the peak.
Inflationary pressures, including elevated inflation expectations and breakeven, argue for a high spread. On the other hand, aggressive rate hikes are priced and real rates are already high.
With inflation likely to peak soon, I find rates in Mexico high enough to receive and have a trade recommendation accordingly, even though there are arguments on both sides.


MXN 10Y

Are Mexico’s Local Bonds Cheap?