Editor's Note: Below is a brief excerpt from today's Early Look written by Hedgeye Macro analyst Christian Drake. Click here to learn more about the Early Look

Shorting the 10Y at 2.95% and continued, synchronistic global growth were/are, skillfully or fortuitously, not our calls.   

Against that backdrop, let’s review a selection of the latest inflation and inflation expectation data:

  • U.S. Fundamentals:  The February Hourly Earnings data failed to confirm the January breakout (we previewed that probability HERE) and the lack of breakout in the February CPI data proved to be fully discounted.    
  • U.S. Inflation Expectations (5Y5Y forward Inflation Swaps) = -14bps off the early February peak
  • U.S. Inflation Expectations (10Y Breakevens) = -6bps off the early February peak
  • $USD/Oil = the dollar is no longer going straight down and oil is no longer going straight up = disinflationary, at the margin
  • Eurozone CPI = decelerated -20bps to +1.1% in February, marking a 3rd month of deceleration and the weakest print in over a year
  • Eurozone Inflation Expectations (5Y5Y forward Inflation Swaps) = -9bps off the latest peak and making lower highs
  • China PPI = decelerated -60bps to 3.7% Y/Y in February, marking a 4th month of deceleration and the lowest print in 16 months

In short, not quite a synchronized wave of global price acceleration supportive of a wholesale shift in policy.  And if our #GlobalDivergences call begins to manifest more acutely with growth decelerating across some major developed market economies, disinflationary pressure will build not ebb.  

CHART OF THE DAY: China vs. US Inflation - CoD Inflation