Given the current feedback loop, softness feeds through to increasing reflation expectations, which is an interesting dynamic that will continue until it’s broken by an exogenous event.
![Something for your Espresso: Softness now also feeds reflation](https://stenoresearch.com/wp-content/uploads/2023/01/Something-for-your-espresso-1080x675.png)
Given the current feedback loop, softness feeds through to increasing reflation expectations, which is an interesting dynamic that will continue until it’s broken by an exogenous event.
The sudden melt-up trend in commodities has a late cyclical head fake vibe to it, but commodities and steepeners probably offer the best macro value in Q2. Here is why..
After having traveled to London last week, I am left with a vibe of a head fake reflation narrative. We are truly late in the cycle, which opens the door for super interesting bets.