Usually there is no point to think too much into one day’s price changes but the magnitude of Monday might have proven again that a 3-8% drop in the main DM equity indices are just solid entry points.

It is the time of the year when financial sites are full of recaps and forecasts about the market. One of the most important stories for next year might be some steam in currently subdued inflation. The financial asset prices clearly benefited from loose monetary policy and the chunk of fiscal tightening is behind us so this anchor no longer does its job. The combination of idle governments and reemerging growth can bring us higher than expected price appreciation. If it’s true then borrowers will benefit from it – higher the growth and inflation are, the less attractive bonds get.

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