We continue to be on the lookout for interesting research on the inflation outlook and how this will play put out in markets. Today we highlight inflation research specialists, Economic Perspectives, who’s analysis shows that inflationary pressures are building most strongly in advanced economies, as shown by producer prices and labour market cost measures. In fact, labour shortages are spilling over into wage bill acceleration, they show. Vacancy ratios in the US, the UK and the euro area are now flashing bright red. Norway is the latest advanced economy where inflation has surprised to the upside, today. Still, Commerzbank argue that this won’t result in a change to the Norges Bank’s defined rate path. Meanwhile, following last week’s steepening of the US curve, we highlight some thoughts from Julian Brigden of MI2 Partners. His view is that financial conditions are far too loose still, partly because the Fed fears the effect of an inverted curve. The problem, argues Brigden, is that unless it is quickly countered by a significant acceleration in the current path of rate hikes (unlikely), it could easily leave the Fed behind the curve and battling a “bear steepener”, as yields at the long end spike. Last week was that shot across the bows. Switching out of inflation, and turning to the Far East, Nomura are bullish on their equity market and USDJPY, while Gavekal highlight the nuances of local government development projects, including Xi’s pet project, the so-called Northern Powerhouse.