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>With US rates reaching the highest levels in a decade, it is not a surprise that the volatility is spilling over to emerging markets.</li>
<li>While South African local bonds had weathered the volatility in 2021 well, this time around, they have gone from outperforming against the rest of EM to underperforming.</li>
<li>Besides external drivers, domestic factors have turned negative as well – particularly rising inflation and worsening debt profile – indicating that rates in South Africa should continue to underperform.</li>
</ul>


With US rates reaching the highest levels in a decade, it is not a surprise that the volatility is spilling over to emerging markets.
While South African local bonds had weathered the volatility in 2021 well, this time around, they have gone from outperforming against the rest of EM to underperforming.
Besides external drivers, domestic factors have turned negative as well – particularly rising inflation and worsening debt profile – indicating that rates in South Africa should continue to underperform.


South African Bonds Switch from Outperformers to Underperformers

ZAR 10Y

South African Bonds Switch from Outperformers to Underperformers