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BofA analysts warned that the global inflationary pulse would be exacerbated by energy costs with oil potentially topping $ 100 a barrel amid limited supply and strong reopening in demand.
The winners in such a scenario would be real assets, real estate, commodities, volatility, cash, and emerging markets, while bonds, credit, and stocks would be negatively affected.
BofA recommended commodities as a hedge, noting that resources accounted for between 20% and 25% of the major stock indices in the UK, Australia and Canada; 20% in emerging markets; 10% in the Eurozone and only 5% in the United States, China and Japan.
The dollar held on as US yields outperformed those of Germany and Japan, lifting it to its highest level since late 2018 against the yen at 112.41.
The euro held at $ 1.1572, having hit the lowest level since July last year at $ 1.1527 last week. The dollar index held at 94.158, just below the recent high of 94.504.
The firmer dollar and higher yields have weighed on gold, which does not offer a fixed return, and sidelined it at $ 1,760 an ounce.
Oil prices rose again after rising 4% last week to the highest level in nearly seven years.
Brent rose 91 cents to $ 83.30, while US crude rose $ 1.13 to $ 80.48 a barrel.
(Reporting by Wayne Cole; Edited by Christopher Cushing and Simon Cameron-Moore)