Deutsche Bank Warns Stocks and Credit Face Repricing Risk Amid Inflation-Policy Mismatch

Deutsche Bank strategists warned in a new research note that global stocks and credit markets could face a sharp repricing as commodity-driven inflation clashes with market expectations for only limited policy tightening. According to Sina Finance, the bank said the current balance is fragile, with energy, food, and raw material costs continuing to add pressure to inflation. The note said bond selling has pushed global yields to multi-year highs, while markets are still pricing in a mild macro backdrop of solid growth, contained inflation, and limited rate increases. Deutsche Bank identified instability in the Strait of Hormuz as a key risk source, noting that Brent crude was near $96 a barrel and European natural gas futures had reached their highest level since early 2023. The bank also said wheat, corn, and sugar prices were rising, even as futures markets still priced in lower energy prices over the next 12 months. It wrote that if that expectation proves wrong, it would create a severe market mismatch and leave stocks and credit assets facing downside pressure.