Markets globally seem to be waking up from the reflation dream; 10y inflation expectations in theUS have now fallen below levels before the US election in November 2016. The fall in inflationexpectations has been driven primarily by sustained weakness in commodities, which hasaccelerated over the past three months (Chart 1). Over the same period of time, fallingbreakevens have also helped front-end US real rates inch higher, raising the cost of funding andfurther squeezing positions in risky assets (Chart 2). Finally, returns in EM FX over this periodhave slumped, amid still increasing positioning (Chart 3). The sell-off in crude oil prices yesterdayonly served to add to risky asset woes, putting further downward pressure on front-end USbreakevens and supporting the recent climb of front-end real rates into positive territory for thefirst time since February 2016.
编辑：钻石赌场 本文来源：EM TODAY