Blokland’s daily sketch

Blokland’s daily sketch

19-04-2021 | Daily sketch
The end of the reflation trade?
  • Jeroen Blokland
    Portfolio Manager
US bond yields are down from their recent highs. The relative performance of cyclicals and value stocks has rolled over. So have we seen the peak in the reflation trade? My guess is, not yet. The impact of fiscal stimulus seems to be underestimated. An example of this was the four percentage point beat in retail sales, which grew by almost 10% in March. Anecdotal evidence of supply chain disruptions is increasing. And long-term inflation expectations are far from extended. Hence, as the reopening broadens, I would expect price pressures to build and bond yields to rise, fueling the reflation trade.
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As a senior portfolio manager I use charts to illustrate financial issues every day. I tweet my favorites as @jsblokland and was named 'one of the 50 most important people for investors to follow in 2018' by MarketWatch.
Previous editions of the daily sketch can be found on my personal financial markets blog. All graphics provided are collected from Bloomberg data and public websites. They do not always reflect my personal opinion and may also not necessarily reflect the opinion of Robeco. Please cite all references or quote the original source if replicating content.

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