Is the reflation trade coming to an end?
This trade started back in March and while we’re approaching the end of the second quarter aka first semester, everything is becoming heavy.
The trade was simple: sell dollars, sell govvies, buy every other asset class. .
But we observe that the hottest stuff is already rolling over. The major indexes still hold, but it seems to be just a matter of time.
Would this mean that what went down, will come up again?
As there are: a stronger dollar and higher prices for US Treasuries?
And also lower commodity prices and the emerging markets losing steam?
One thing is for sure: the economy seems to stabilize, but it’s only a rebuilding of inventory. With raising unemployment, the consumer is trapped and no way he’s able to obtain this is through savings. Or better: less consumption.
Sphere: Related Content
This trade started back in March and while we’re approaching the end of the second quarter aka first semester, everything is becoming heavy.
The trade was simple: sell dollars, sell govvies, buy every other asset class. .
But we observe that the hottest stuff is already rolling over. The major indexes still hold, but it seems to be just a matter of time.
Would this mean that what went down, will come up again?
As there are: a stronger dollar and higher prices for US Treasuries?
And also lower commodity prices and the emerging markets losing steam?
One thing is for sure: the economy seems to stabilize, but it’s only a rebuilding of inventory. With raising unemployment, the consumer is trapped and no way he’s able to obtain this is through savings. Or better: less consumption.
No comments:
Post a Comment