This pullback in the market off the morning’s highs is again being led
by the three most important groups in my opinion when analyzing the
state of the US economy, retail, housing and financials. The weakness
last week was also led by these three groups while at the same time the
reflation trade outperforms, helped by the US$ weakness. The implied
inflation rate in the 10 yr TIPS is up for a 4th day, 21 bps over that
span, to 1.69%, the highest since late Sept ’08.
