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Market Extra: There’s another land of opportunity in the reflation trade — Europe

The prospect of higher inflation, driven by plans for Trump administration spending, has lifted spirits on U.S. markets. But there’s another land of opportunity for the reflation trade, analysts say: Europe.

Financial markets worldwide have been lifted by U.S. President Donald Trump’s promise to ramp up fiscal spending and reform taxes. The hope is that these projects will spur economic growth in the U.S. and help drive up inflation.

In anticipation, investors have been buying stocks — sending some global benchmarks to record highs — as well as the U.S. dollar DXY, -0.01% . At the same time, they have been dumping safe-haven assets such as bonds, sending yields rising as their prices fall.

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