The reflation theme has shifted a gear with yesterday seeing US yields soar to post-pandemic highs, in which US 10yrs briefly hit 1.33% before pulling back slightly. The move in US fixed income has lent support to the USD which has broken back above the trendline from the March 2020 peak. That said, the near term concern for risk appetite is the speed of the move in US yields, where a continuation could provide a headwind for the lofty valuations across equity market, keep in mind that from mid-Feb equities have tended to drift lower. That said, should a equities weaken, the move is unlikely to derail the longer-term trajectory for equities, which remains positive, given that the Fed will not be pulling back from stimulus anytime soon and another fiscal stimulus package is on the horizon.
