The past weeks have confirmed that phase one of the ‘great recovery’ is now behind us. We have entered a new sequence: PMIs decelerating from their peaks and concerns about the spread of the Delta Covid19 variant are features of it.
Some cracks in the reflation trade that has lifted markets in 2021 have driven a pause in the cyclical/value outperformance. In contrast, the acceleration in inflation continues, with the latest numbers in the US once again far above expectations.
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