Fixed Income and Currency Strategist

Gautam Jain, PhD, CFA

FX & Rates

<ul>
<li>In my monthly recap note, I provide a performance update of my trade recommendations in emerging markets FX and rates.</li>
<li>Of the total of 35 trade recommendations made so far, I have recommended closing 25 of which 18 were in the money.</li>
<li>I also update my views on the open trade recommendations and go over the rationale behind those that I closed recently.</li>
</ul>


In my monthly recap note, I provide a performance update of my trade recommendations in emerging markets FX and rates.
Of the total of 35 trade recommendations made so far, I have recommended closing 25 of which 18 were in the money.
I also update my views on the open trade recommendations and go over the rationale behind those that I closed recently.


Alpha Bites: Performance Summary of Trade Recommendations in FX and Rates – March 2022

<ul>
<li>With Russia invading Ukraine, my view of the dollar remaining strong and possibly appreciating further in the near term is playing out.</li>
<li>EM currencies have weathered the spillover from Russia and dollar strengthening well so far, but this may be about to change as their (negative) beta to the dollar has increased.</li>
<li>Beyond the near term, the outlook for the dollar and EM currencies has become hazy given the uncertainty emanating from Russia's invasion and the fallout of the sanctions.</li>
</ul>


With Russia invading Ukraine, my view of the dollar remaining strong and possibly appreciating further in the near term is playing out.
EM currencies have weathered the spillover from Russia and dollar strengthening well so far, but this may be about to change as their (negative) beta to the dollar has increased.
Beyond the near term, the outlook for the dollar and EM currencies has become hazy given the uncertainty emanating from Russia's invasion and the fallout of the sanctions.


Contagion Risks from Russia to Other EM Currencies

<ul>
<li>In an environment marked by uncertainty with regards to the dollar's next move, EM currencies have been stable and LatAm currencies have outperformed Asia and CEEMEA so far this year.</li>
<li>The strong start for LatAm currencies is partly to make up for their underperformance last year and partly supported by their high carry relative to other currencies.</li>
<li>If risk aversion remains low, this trend should persist but given the uncertainty, it is best to be selective and target relative-value trades to take advantage of differences across countries.</li>
</ul>


In an environment marked by uncertainty with regards to the dollar's next move, EM currencies have been stable and LatAm currencies have outperformed Asia and CEEMEA so far this year.
The strong start for LatAm currencies is partly to make up for their underperformance last year and partly supported by their high carry relative to other currencies.
If risk aversion remains low, this trend should persist but given the uncertainty, it is best to be selective and target relative-value trades to take advantage of differences across countries.


Will Latin American Currencies Continue to Outperform Against Asia and CEEMEA?

<ul>
<li>I explore the 2021 winners and losers among EM currencies, leading into the discussion on which of these performances were appropriate and which currencies may offer opportunities this year.</li>
<li>The currencies to track this year for opportunities to buy are Chilean peso and Peruvian sol, and to sell are Colombian peso and South African rand. </li>
<li>Among currencies that already look appealing to buy are the Indian rupee and the Thai baht, while the Chinese yuan and the Czech koruna appear expensive.</li>
</ul>


I explore the 2021 winners and losers among EM currencies, leading into the discussion on which of these performances were appropriate and which currencies may offer opportunities this year.
The currencies to track this year for opportunities to buy are Chilean peso and Peruvian sol, and to sell are Colombian peso and South African rand. 
Among currencies that already look appealing to buy are the Indian rupee and the Thai baht, while the Chinese yuan and the Czech koruna appear expensive.


Not All Winners Are Equal: 2021 EM FX Outliers and Implications for 2022

<ul>
<li>The Hungarian forint has underperformed due to the central bank (NBH) lagging peers in terms of the pace of rate hikes combined with the overheating risk from pre-election spending.</li>
<li>I expect HUF to make up some of the lag as the central bank is showing urgency now by raising the 1-week deposit rate by more than the benchmark rate.</li>
<li>The cross against Czech koruna makes sense because of its high correlation with the forint, especially in the context of the rising US dollar volatility arguing for limited beta exposure.</li>
</ul>


The Hungarian forint has underperformed due to the central bank (NBH) lagging peers in terms of the pace of rate hikes combined with the overheating risk from pre-election spending.
I expect HUF to make up some of the lag as the central bank is showing urgency now by raising the 1-week deposit rate by more than the benchmark rate.
The cross against Czech koruna makes sense because of its high correlation with the forint, especially in the context of the rising US dollar volatility arguing for limited beta exposure.


Alpha Bites: Long Hungarian Forint (HUF) Vs Short Czech Koruna (CZK)

Hungary

The Hungarian forint is the official currency of the Republic of Hungary. The US Dollar is the official currency of Unites States of America.

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HUF (USDHUF CURNCY)

Alpha Bites: Performance Summary of Trade Recommendations in FX and Rates – March 2022

I provide a performance update of all my trade recommendations along with discussing the open trades. I have closed 25 of the 35 trades recommended...

Gautam Jain, PhD, CFA

Contagion Risks from Russia to Other EM Currencies

EM currencies have weathered the dollar strengthening well so far, but this may be about to change as their (negative) beta to the dollar has...

Gautam Jain, PhD, CFA

Will Latin American Currencies Continue to Outperform Against Asia and CEEMEA?

If risk aversion remains low, LatAm currencies should continue to outperform but given the uncertainty, it is best to target relative-value trades...

Gautam Jain, PhD, CFA

Not All Winners Are Equal: 2021 EM FX Outliers and Implications for 2022

I explore the 2021 winners and losers among EM currencies, leading into the discussion on which of these performances were appropriate and which...

Gautam Jain, PhD, CFA

Alpha Bites: Long Hungarian Forint (HUF) Vs Short Czech Koruna (CZK)

I recommend a Long Hungarian forint/Short Czech koruna trade as the central bank is now showing urgency in raising rates to make up for the...

Gautam Jain, PhD, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)