The next big black swan

Who cares about how deep the recession will be. Much more interesting according to Soc Gen's Albert Edwards is how much will yields fall. The most recent px action in oil and commodities is interesting, especially since consensus is so strong (see our logic on oil here). Edwards continues: "Will a recession dispel inflation fears (temporarily) and drive bond yields substantially lower? The outlook for commodities is key, especially with the backdrop of the war in Ukraine. But I still see commodity prices plunging just like in Q4 2008, back then taking headline CPI inflation from +5% to -2% in just 12 months." It looks like consensus regarding rates and commodities moving only higher could be in for a wild ride...