It was a tale of two halves this week as we started with a raging global reflation trade and then stocks got hammered on Thursday and payrolls today put another cat amongst the pigeons. We have generally been seeing a pretty aggressive reflation trade as the market views the Fed as rather dovish considering financial conditions and the big turn in commodities which is likely to be inflationary at some point. The big story right now is the resurgence in commodities in a world where there is basically zero chance of rate hikes to reverse any inflationary impulse. This sets up for a big debasement trade and that is what ... (full story)