Failure to pass the Healthcare Bill doesn’t mean that President Trump’s entire agenda is in tatters, but it’s a huge setback and the market mood reflects as much. Bond yields, the dollar, commodity prices and equities are all weaker. The next market line in the sand is the 2.30% level for 10-year Treasuries. Bond bears need some barnstorming data to remind us that the economy is in decent shape, but research we highlight in today’s briefing points to the ingredients for a decent rally in bond yields as the reflation trade seems to have run its course. That’s not to say one shouldn’t turn their back on inflation. Enodo Economics argue that China’s CPI is set to surprise. We highlight some of their research today, where they look at spikes in short-term money market rates (though not related to inflation). We read more and more these days on the passive versus active investing theme, and we include an interesting note from Ned Davis Research that provides some insight into passive investing correlations which appear to be breaking down, opening up opportunities for active managers.