Make no mistake, the “global inflation” Trend is a consensus one. Spain reported their June PPI numbers this morning at +9% year over year. That was a 23 year high. Given that stocks are discounting mechanisms of future news, it should be no surprise to the revisionists out there at this point that the Spanish stock market ended up losing almost 1/3 of its value from its October 2007 peak (when inflation was not consensus).

The “Trade” here in global equities is that inflation is abating sequentially from its June 2008 peak. Yes, inflation remains elevated, but that’s not the point. The point is that once you’re reading the July inflation reports, they’ll have come down from June.

Jean Claude Trichet and the ECB are going to start to look a lot smarter by the day. They stepped up, raised rates, and quelled inflation… for now.