The ‘made in the Eurozone’ reflation trend shares many of the characteristics seen in other developed markets, chiefly in the US. If correlation between global markets is not a new phenomenon, the rationale in the Eurozone is harder to make sense of. We wrote in our 2021 outlook that the divergence between USD and EUR rates markets would be one of the key themes of the year. This has largely proved true for nominal rates…but inflation expectations have been rising apace on both side of the Atlantic. The Eurozone economy remains dogged by harsher lockdown policies than in the US, a slower vaccine rollout and, most ... (full story)