Bond, currency and equity market were all spooked on Friday by the reported rise in the 5-10 Yr. inflation expectations component of the University of Michigan’s preliminary May Consumer Sentiment survey. It rose to 3.2% from 2.9% against an expected 3%, its highest reading since March 2011 (also 3.2%) and previously higher (3.4%) as far back as mid-2008 just prior to the GFC. No matter that Consumer Sentiment itself slumped to 57.7 from 63.5, well below expectations. The release sparked a 10bps jump in front-end US bond yields, a 0.5% rally in the DXY dollar index and near 1% fall in the S&P 500 (about half of ... (full story)