Sep 8, 2026 · 15 min · 9 segments
In this episode of J.P. Morgan's Making Sense, Meridy Cleary from the FICC Market Structure and Liquidity Strategy team sits down with Carlos Gomez-Gascón, head of EM Rates e-Trading, to explore how…
Carlos Gomez-GasconGuest
Meredith ClearyHost
And Carlos, you run EM Rates, which of course covers several different asset classes.
Are there nuances in how you approach improving workflows across those and how they interact?
First of all, the three asset classes that I mainly cover are bonds, interest rate swaps, and FX swaps.
And there's a relationship between all of them and a bit of an echo environment.
Maybe the best way to explain it and the starting point is thinking about an FX swap.
So an FX swap has, if you break it down into like the different components of its pricing, it's priced out of a software curve, a local curve, and the cross currency basis.
So there we're already like putting together interest rate swaps with FX swaps.
And then finally, there's the bond market, which has very stable, normally very stable bond basis between bonds and swaps as well.
And as you improve one of the pieces of the puzzle, you effectively are able to improve the others.
Also in the long run, what you would expect is to take views that encompass the three asset classes together and to take risks effectively across all of them in a consistent manner.
Okay, and if we focus in on the swap market that you mentioned, when it comes to EM automation, we've seen a steady push and importantly, electronic trading is extending to larger risk sizes and more workflows in EM IRS, right? So if we think about this journey towards electronification in this market, what have you seen driving that change and why now?
First of all, there is a growth in electronic channels and electronification across the board.
I think there's a lot of new technologies, new startups, AI, and all that increases the appetite to look at electronic execution in the EM rate space.
The growth really is everywhere in LATAM, Asia, SINIA, and across all asset classes.
IRS, though, has the advantage of having a lower capital cost and is therefore the preferred channel for hedge funds.
Also, IRS has the feature that is much better standardized than maybe other asset classes into tenors, which makes backtesting and thinking about strategies of investment a lot simpler of a process.
And Carlos, you run EM Rates, which of course covers several different asset classes.
Are there nuances in how you approach improving workflows across those and how they interact?
First of all, the three asset classes that I mainly cover are bonds, interest rate swaps, and FX swaps.
And there's a relationship between all of them and a bit of an echo environment.
Maybe the best way to explain it and the starting point is thinking about an FX swap.
So an FX swap has, if you break it down into like the different components of its pricing, it's priced out of a software curve, a local curve, and the cross currency basis.
So there we're already like putting together interest rate swaps with FX swaps.
And then finally, there's the bond market, which has very stable, normally very stable bond basis between bonds and swaps as well.
And as you improve one of the pieces of the puzzle, you effectively are able to improve the others.
Also in the long run, what you would expect is to take views that encompass the three asset classes together and to take risks effectively across all of them in a consistent manner.
Okay, and if we focus in on the swap market that you mentioned, when it comes to EM automation, we've seen a steady push and importantly, electronic trading is extending to larger risk sizes and more workflows in EM IRS, right? So if we think about this journey towards electronification in this market, what have you seen driving that change and why now?
First of all, there is a growth in electronic channels and electronification across the board.
I think there's a lot of new technologies, new startups, AI, and all that increases the appetite to look at electronic execution in the EM rate space.
The growth really is everywhere in LATAM, Asia, SINIA, and across all asset classes.
IRS, though, has the advantage of having a lower capital cost and is therefore the preferred channel for hedge funds.
Also, IRS has the feature that is much better standardized than maybe other asset classes into tenors, which makes backtesting and thinking about strategies of investment a lot simpler of a process.
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