Bond-stock clash begins just as inflation bogeyman looms

New York

THE tug-of-war between stocks and bonds is at the heart of the shakeout roiling financial markets. This week's US inflation report could hold the key to the next phase.

Seemingly every time 10-year Treasury yields approached a four-year high last week, equities investors panicked, fearing the spectre of higher inflation and a more aggressive pace of Federal Reserve rate hikes.