Not that irrational exuberance

Edito Despite the noisy news flow, particularly concerning the pandemic, the past week showed a continuation of the reflation trade with: a sharp widening of long-term yields, which hit new records and thereby weighed on credit performance (particularly investment grade); the cyclical sectors abandoned during the crisis finally attracting investor interest; oil prices up by nearly 5% and gold prices down. The expected end of the health crisis, resulting in a return to activity in a global context of positive policy mix, should further fuel this trend. It remains to be seen whether the expectations caused by strong pent-up demand will materialise.