Markets: Gone coy on the ‘reflation trade’ of late - ANZ

In view of the analysts at ANZ, markets have certainly gone coy on the ‘reflation trade’ of late. But why?

Key Quotes

“Global activity data continues to have a generally positive hue and there are clearer signs that core inflation, at least in the US, is lifting? Fingers can be pointed US administration’s difficulties in getting fiscal promises enacted and the many questions that linger over the European political situation. Core inflation may be up in the US, but it doesn’t have many global friends. But it also may reflect the fact that the positive data tone, especially in the US, has largely been a ‘soft’ story. Sentiment surveys have been sturdy and remain elevated, but the ‘hard’ data have generally failed to match that optimism. Markets, rightly or wrongly, appear to be discounting the former at present.”