Thank you for sharing André,

I’m not much on the reflationary camp I’m afraid.

As mentioned in the post I believe that one should not mix up credit repricing with a virtuous reflationary comeback. Appealing but I just fail to see it.

As the election dust settle I think that the underlying economic pattern will re-emerge, i.e. a very soft one. In the first place I expect interest rates to be a drag on leverage, which as you know is sky high.

As far as my topics of interests (and risks!) are concerned, I would focus on the negative impact of an interest rate shock on various carry trades: credit, oil (which I believe is a big part of the reflation call), emerging markets and currencies, the cost of debt, capital flows and trade. Not to forget the level of activism of central banks, which – I believe – is increasingly tested by the market.

Rightly so.

Read you soon,

Jacques

“– The US presidential outcome is not a game changer but a game booster: the trends above were already in place prior to the election. Expect them to unfold ;”

Completely agree. Reflation all around. Also, earlier this year, we changed our deflationary view held for nearly 10 years to much more neutral, as being long bonds finally became the accepted (and very crowded) view. Metals are showing us the way. For the first stage of reflation, I’d say be long equities (rising earnings). What’s your favourite trae?