Global indices are displayed on a screen on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 19, 2021. REUTERS/Andrew Kelly

LONDON, Aug 25 (Reuters) – Stock markets are heading into September near record highs but the fast-spreading Delta coronavirus variant is making some investors reassess how so-called reflation trades could perform in coming months.

A raft of indicators from consumer surveys to derivatives suggest that without fresh catalysts markets could be in for a pause or even a reversal over the autumn months. Speculators have also been piling into the dollar, with positioning at its highest in a year.

“Although equity headline indices keep registering new highs, there has been a clear rotation to defensive plays,” said Vasileios Gkionakis, Global Head of FX Strategy at Lombard Odier in Switzerland.

Defensives, which are less vulnerable to swings in the global economic cycle,…

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