The new nominal takes shape

Markets are waking up to inflation. This echoes our new nominal theme, which points to real yields staying deeply negative – a positive for risk assets. • U.S. stocks hit record highs as President Joe Biden took office. Italy averted further political chaos as the government won a confidence vote in parliament. • Markets will monitor U.S. consumer spending data this week to gauge the size of the pent-up demand that would be key to the speed of activity restart.