A pause in the reflation trade?

Recently, a growing narrative in the market is arguing for a pause in the reflation trade for the following reasons:

• Both the cyclically sensitive copper/gold and base metal/gold ratios have moved sideways.
• The 10-year Treasury yield peaked out in March and it is now falling, which is an indication of the bond market's belief of a retreat in growth expectations.
• The Chinese stock market has tanked relative to global stocks, as measured by MSCI All-Country World Index (ACWI).

If these market signals are indeed pointing to a pause in growth expectations, then investors should be prepared for either a risk-off tone in the markets or some choppiness and consolidation in the months ahead.

The full post can be found here.