RBA
The RBA looking a touch more hawkish, now. Dollar up, yields up, risky assets down, longer duration assets down (REITs).
There’s more to go, as indicated by both participants and market pricing, given inflation is out of hand.
These will climb inexorably higher.
Given very high levels of household debt, and an overvalued housing market, material caution should be exercised regarding any significant concentration risks.
For us, we are a) underweight Australian shares, preferring international b) have lots of rates beneficiaries (insurers, banks) and c) underweight pointier parts of the market like consumer discretionary, builders.
We’ve got a good mix of floating rate debt and, at these prices, continue to find intermediate maturity government bonds attractive.
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