Albert Edwards at Societe General with the note:
The unravelling Chinese Credit Impulse we highlighted earlier this year accurately foretold the stalling of the global reflation trade. Is this a pause that refreshes or are we in a re-run of a decade ago? For back in 2011 a bubble of reflation enthusiasm burst, and bond yields quickly slumped from 3¾% to 1¾%–a new Ice Age low.
Over recent months as real bond yields revisited record negative lows and breakeven inflation ‘expectations’ retreated from recent highs, equity sector rotation has reflected these changes, with growth stocks regaining their footing relative to value stocks.
