Have markets priced out doom and priced in easy money again? Reflation trade is roaring back, until it isn't.
U.S. markets (Chart 1) have priced out War, a new Omicron variant , a Solar Storm, knocking out 40 SpaceX satellites (which is quite amusing in someways), inflation ala Central Banks beginning, once again, playing down it again, worst is of course the European Central Bank, followed by the Bank of England message to the poor workers of the U.K., "don't take a pay rise" madness. It is a clear overconfidence trade at the moment with pricing in that the Federal Reserve's token half % rate rise in March which has already been factored in, note Chart 2, with the U.S. Dollar futures and DXY (USD against a basket of other currencies), both are selling, with Central Banks continuing jawboning their currencies downward it is no wonder investors/people are shifting into Crypto Coins that at this point in time have more purchasing power than EUROs and USDs, alas putting further downside pressure on denominated currencies, thus, adding to inflation concerns = lower the purchase power of traditional currencies, higher the price of goods. Pretty simple. Chart 3, shows Bitcoin gaining bids as noted in this post, that the 10YR and BTC are correlating more so than the USD.
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