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This picture is one that we often discuss in our morning research meetings. The correlation of the CRB Commodities Index to Brazilian stocks.

For the last month, we've been talking about the breakdown in the Brazilian Bovespa as a leading indicator for inflation. After this week's stiff -7.4% correction in the CRB Commodities Index, this positive correlation proved powerful once again. Brazilian stocks sniffed this correction in inflation readings out well in advance of the crowd.

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CRB Commodities Index vs. Brazilian Equities