Bonds & Stocks Are "Pricing A Fundamentally Different Macro Regime"; Deutsche Is Watching These 5 Market Dislocations Closest

Last month, Deutsche Bank Macro Strategist, Henry Allen, highlighted (in a note available here for pro subs) a sizable dislocation that rates markets didn’t reflect the inflationary pressures ahead, with only limited tightening cycles priced in. They argued that, absent a fall in inflation, the pressure on rates would continue.

They have been proved very correct as we have seen a major bond sell-off, alongside clear signs of broader stress: European sovereign bond spreads have widened significantly; investors are pricing in faster rate hikes from central banks; and the disruption in oil markets has kept Brent crude above $100/bbl.