By Michael Msika and Jan-Patrick Barnert, Bloomberg Markets Live reporter and strategists
A soft US inflation print is brightening market sentiment, at least in the near-term, with short positions being trimmed and new money flows put to work.
The data, which came after a month of weak performance, certainly didn’t knock down the wall of worry restraining stocks but the mood is showing early signs of flipping. It might only last until the next data point — which could be a speech from a Fed official or key corporate earnings report — yet there are some technical aspects that could keep the bullish momentum going for now. Treasury yields have receded below 4.7% but a confirmation of the trend will be needed to make the rally durable, especially as correlation with stocks is currently deeply negative.
