Gold Price vs. U.S. 10-Year Real Rates (Using Breakeven Inflation Rate) Pictet expects gold prices to reach new highs to US$2,150/oz in the next 12 months. Image: Pictet Wealth Management
Euro to U.S. Dollar (EUR/USD) and Core Inflation Difference (Leading Indicator) Chart suggesting that EUR/USD could drop further, as core inflation in the euro area plummets to record lows. Image: Nordea and Macrobond
U.S. Core Inflation Expected Over the Next 21 Months (Leading Indicator) This chart suggests that M2 velocity year-over-year leads U.S. core CPI by 21 months (R² = 0.54 since 1996). It has been quite accurate for more than 20 years. Click the Image to Enlarge
Core Consumer Price Inflation vs. Velocity of Money There are downside risks to U.S. inflation, as velocity of money tends to lead U.S. core CPI. Image: BCA Research
ECB Staff Forecasts on Inflation How much trust should investors have in the ECB’s inflation forecasts? Image: Deutsche Bank
U.S. Producer Price Inflation and S&P 500 Earnings There is little doubt that the bottom in earnings is in for this cycle, as U.S. producer prices rose more than expected in September. Image: Jeroen Blokland
Inflation – U.S. Core PCE Deflator This chart could suggest more inflation ahead. Image: Alpine Macro
U.S. Inflation and Biden Policies Fiscal stimulus is expected to produce somewhat higher inflation. Image: Goldman Sachs Global Investment Research
S&P 500 Valuation – Average 12m Fwd P/E and Y/Y Headline Inflation Chart suggesting that rising inflation is good for P/E until inflation exceeds 3%. Image: Goldman Sachs Global Investment Research
Cyclicals vs. Defensives and Inflation 5y/5y Forward Cyclicals tend to outperform when inflation expectations rise. Image: Goldman Sachs Global Investment Research