[ MEET THE DESK | RBC BLUEBAY ASSET MANAGEMENT ’ S LONDON FIXED INCOME DESK ]
“ In an environment where bank cost of funding is increasing with rising rates they are more selective in terms of how the balance sheet is deployed .”
DEEPE RAJA of trading the different currencies and the settlement issues surrounding those . DM is quite straightforward in and out , lots of liquidity .”
For Deepe Raja , hard currency sovereign and corporate debt emerging markets trader set to celebrate his tenth year at BlueBay later this year , it ’ s the range of country-specific macroeconomic factors that influence liquidity in the emerging markets which make them so interesting to trade . Hard currency traders execute emerging market sovereign and corporate debt , denominated in a non-local currency .
“ Emerging markets sentiment is largely driven by the broader macro risk tone across rates , equities and commodities , in conjunction with idiosyncratic stories , geopolitics and economic data releases that are EM country specific ,” he says . “ It ' s more allencompassing trading emerging markets than it is another asset class .”
Core relationships It is because of the emerging markets liquidity landscape that relationships are essential . Broadly speaking , emerging markets as an asset class is less liquid than developed markets , and within that credit even more so .
“ Trading emerging markets credit for the sell-side is more capital intensive and requires more balance sheet usage . In an environment where bank cost of funding is increasing with rising rates they are more selective in terms of how the balance sheet is deployed . If you have an established relationship with a bank trading desk they will naturally be more inclined to deploy balance sheet to facilitate your trades ,” explains Raja .
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