The first month of 2021 was certainly eventful! The markets started on a strong footing after the Democrats won the Georgia runoff elections which triggered optimism of their ability to pass larger fiscal stimulus through congress to support the US economy. The beginning of vaccine rollouts across the developed world provided money managers with what they needed to believe in the reflation narrative which was further fuelled by a weaker dollar. The positive reflation trade sentiment resulted in strong commodity markets particularly led by Oil and Grains, whilst Copper which had been very strong late last year took a breather. However, precious metals struggled to gather any momentum due to real yields ticking up, as bond markets started to price in some cyclical inflation expectations for the latter part of the year. US 10Y treasury yields backed up 30 basis points in a week after trading sideways for most of December, begging the question, at what level of yields would the equity market get concerned.