Insights

We are coming close to finalising our Growth Alternatives Sector Review and we thought it timely to share some of our thoughts and key considerations. This is arguably the most challenging sector across asset classes to review, and yet also...

Private Credit has seen significant growth as an asset class in Australia over the past 5 years or so. Given this growth, and given where we are in the economic cycle, we thought it timely to conduct a review of...

Much of the Australian Federal Budget for 2023-24 had been leaked in the build up to last night’s formal release which resulted in a muted response to last night’s actual announcement.

As was largely expected the RBA yesterday decided to increase the cash rate to 3.35% with a 0.25% increase from their December meeting. There were a couple of key messages in the statement around inflation expectations and future rate hikes.

Early in the morning of 2 February Australian time the Fed raised the target Fed Funds rate by an expected 25 basis points to 4.50/4.75%. Chair Powell noted there was no reason for the Fed to differ from its guidance...

Australian CPI is released monthly, and the annualised rate released on Wednesday 25 January was a truly shocking 8.4%. This series is very new and the ABS has decided that it will not be as comprehensive as the quarterly release...

The United States of America running at high levels of debt is nothing new, however COVID related fiscal policy has seen this balloon in the past few years to be at 123.6% of Nominal GDP(Sept 2022). The US has now...

The US Bond market rode a rollercoaster last month, starting down the road that leads to strong action by the Fed and doing a sharp U turn to price for a swift end to inflation as the key factor in...

2022 started with some major equity indices near their all-time highs and the vast majority of central banks entertaining record low interest rates. However, over the past 12 months, we have seen the geopolitical and economic landscape significantly change.

At its meeting on Tuesday 6 December, the RBA Board decided to increase the cash rate target by 25 basis points to 3.10 per cent. The continued mantra is that inflation in Australia is too high (6.9 per cent over...

In the last 30 years, Aussie interest rates have often been higher than US rates. Looking at the chart below, for the lion’s share of that time the Aussie 11am Cash Rate was significantly higher than the US Fed Funds...

At its meeting just before the Melbourne Cup, the RBA Board decided to increase the cash rate target by 25 basis points to 2.85 per cent. They noted that inflation in Australia is “too high” and yet retained their moderation...

Federal Treasurer Jim Chalmers delivered his first Budget to Parliament only five months after the Labour Party won the federal election.  Inheriting an economy at close to full employment, high inflation and having watched the events of the UK post...

The RBA may be rueing their decision to temper the pace of their rate hikes this month with a truly awful CPI release on 26 October. The tough news was CPI in the quarter hitting 1.8% and 7.3% annualised, both...

In what has been one of the most uncertain periods for the United Kingdom for decades, volatility and uncertainly has taken a significant step up in the last few weeks.

With the post-pandemic bull market rally ending earlier this year, and as the economy moves to a tightening cycle, we are seeing a disparity between the consumer’s sentiment and their balance sheet. Consumer sentiment is at multi-year lows, yet household...

The Federal Reserve is made up of several regional Feds, and Kansas City plays a very key role in their calendar as it hosts the Jackson Hole Economic Policy Symposium (known simply as “Jackson Hole”). This annual event is the...

It has been a perfect storm on both the demand and supply side for the oil market since late last year with Geo-political tension, supply chain issues and the re-emergence of business/leisure travel. As oil prices have fallen 30% from...

Google Trends is a highly unscientific tool to see what is important to people. Looking at the chart below it seems only a few of us were checking for latest inflationary developments before the Russian invasion of the Ukraine started...

Innovation is critical and as a generation in the 21st century, we are lucky to witness the start of a new era of digital financial innovation. Over the past few years, we have seen a rapid evolution of different FinTech...

For the second meeting in a row the Reserve Bank of Australia’s Board has raised the cash rate by 50 basis points, putting the cash rate now at 1.85%. We have had 1.75% of increases this year, the fastest pace...

Australian economists were pleasantly surprised when the June quarter CPI was released, and it was “only” 6.1%. The violent adjustment in bond yields, equity prices and sentiment that came along with that dragon jumping out of its cage earlier this...

On Tuesday, 19th of July the minutes of the July RBA Board meeting that decided to raise the Cash Rate by 50 basis points was released. The Board said that it was absolutely determined to “withdraw some of the substantial...

The biggest impact inflation has had is not the higher cost of gas for the American commuter or that steak is a once a fortnight not once a week family meal, but a quick unwinding of the “extraordinary” financial measures...

Boris Johnson’s resignation last week opens the door for a Conservative leadership election over the coming weeks. The leadership issue has been an overhang for the last few months, therefore most would expect the party will look to move swiftly...

I was reflecting on the speed of change in markets. If we think back to Covid - that was the quickest bear market we have ever seen. This half we have essentially seen the most material shift in the yield...

Markets have faced a troublesome few months, with uncertainty rising higher than it was earlier in the year. Central banks are now truly realising the magnitude of inflation that they are faced with, and with that we are almost seeing...

The people of Hamelin realised they had a rat problem but didn’t like the cost of the solution. On Wednesday (early Thursday a.m. our time), Jay Powell the Chair of the Federal Reserve Open Market Committee (FOMC) did the only...

The collapse of the Terra/Luna ecosystem has been a stain on the cryptocurrency industry for the past few weeks – supporting the arguments of many sceptics who talk of tulips, bubbles and the need for harsh and sweeping regulation. Whilst...

Over the past two years, the focus on inflationary rhetoric has been primarily centred around the disruption of supply chains, and injections of fiscal and monetary stimulus. What has received less attention is the role of wages in the inflationary...

Our next Federal election is to be held on 21/May, 10 days away, and pre-voting is already open. Domestic financial markets are looking at the election in two different ways; 1/ Both major parties are similar and the ultimate result...

Inflation has been very topical for months now and there is no doubt that its effects are being felt globally. The economy is experiencing robust yet falling growth, so could Central Bank tightening policies put a handbrake on economic growth...

Yesterday the ABS published our domestic CPI data for Q1 and the result was an upside surprise, where inflation pressures surged above consensus expectations, and even further above previous RBA estimates. Today’s note details the underlying components seeing costs of...

Whilst financial markets have remained largely fixated on energy markets throughout the Russia-Ukraine crisis, an impending hunger crisis has been festering in the background which could have grave implications for the global economy, as well as on the health and...

On Tuesday evening, our Federal Budget for FY2022/23 was handed down and was definitely an election year Budget less concerned with fiscal consolidation than yesteryear. Windfalls from higher than forecast commodity prices boosted revenues, as did a quicker rebound in...

Today marks the 34th day since Russia’s invasion of Ukraine, where both sides have entered into a protracted stage of conflict where neither side has shown signs of being able to definitively secure victory in the short term. Global markets...

The use cases of NFT’s will span far beyond the digital art and collectibles markets we see today, through their properties of being verifiably scarce, portable, and programmable digital assets. Their key values lie in being able to establish digital...

Agriculture exposure is something that is overlooked when constructing a portfolio, which is odd, when you consider that agriculture produces the food which everyone looks forward to at breakfast, lunch, and dinner.  In Australia, agriculture contributes 3% (about $50 billion...

Each year, International Women’s Day provides a strong reminder that we’re continually failing as a society to provide gender equality, considered by the United Nations to be a fundamental human right, but also a necessary condition for a peaceful and...

Late last week and over the weekend, several nations joined forces to jointly sanction Russia for invading Ukraine. One of the latest sanctions was an economic restriction on specific Russian banking institutions from using the SWIFT electronic-payment-messaging system that forms...

Last Thursday morning (local time), Vladimir Putin launched a broad based Russian military offensive against Ukraine – starting what is by some measures the largest armed conflict in Europe since WW2. It has currently involved missile, air and artillery strikes...

Copper has experienced a “death cross” price event, where short-term average price has declined below long-term average price levels. While this type of technical price indicator is lagging in nature, there’s only been 5 such events in the past 30...

One of the most important news stories over the past few months has been the escalating Ukraine-Russia tension, where the threat of invasion has continued to linger over the world as negotiations continue to fall afoot of Russian demands. Uncertainty...

The capacity to self-custody cryptocurrencies generates an immeasurable opportunity for current, and potential market participants. Through the removal of intermediaries, access to this section of capital markets is granted to anyone with a working internet connection, and some spare change....

Monetary policy is set to become less expansionary and accommodative this year, although not outright contractive, will provide less impetus for risk assets to continue their stellar performance of recent years. This year we must come to understand a new...

Over the past two years cryptocurrencies have emerged from the fringes of capital markets to become regular talking points within asset allocation discussions. However, whilst the seemingly exponential growth of valuations over the past few years has been attractive enough...

Welcome back to the Mason Stevens morning note series. Since we left off in our last note on 10/Dec, quite a lot has happened and asset prices have moved somewhat, notably equity markets are off their 2021 highs. For our...

CY2021 like 2020 has yet again been dramatically influenced by COVID infection and hospitalisation rates, likely a year that flew by for most of us, and one with less memories that stand out, with less experiences to use as reference...

2021 has been a breakout year for cryptocurrencies, with its dramatic rise through the ranks of popular culture seeing the asset class move from the fringes of society, to a focal point within political and investment-based discussions. Despite this, the...

For the everyday Australian, their superannuation account will be one of the most important investments of their lives, serving as a stable base to support their retirement. Given its importance to our lives, we should spend time dwelling on how...

Both geopolitics and investment management are about philosophy and strategy, where both incorporate at least some degree of forecasting or signalling of future events. Our considerations of the future and the way it relates to our present self is couched...

The Metaverse has received significant press attention over the past few weeks on the back of Mark Zuckerberg’s announcement to change Facebook’s name to Meta. But what exactly is the Metaverse? The Metaverse can’t by defined by a location, or...

We’re into month eleven of COVID-19 vaccinations globally and eight months into the Australian process. In the past month there’s been many newsworthy items as COVID-19 pills have been tested in clinical trials, with results sent to global health regulators...

Over the past 18-20 months since the pandemic struck, a trend has been established where workplaces have experienced higher staff turnover, often with employees quitting without another job lined up. This has occurred with increasingly regularity in the past six...

Bitcoin reclaimed its all-time-highs last week, and it seems like time to revisit the world of cryptocurrencies, and more specifically, its largest threat – regulation. Cryptocurrencies, and blockchain technology more broadly, offer the potential to revolutionise our digital world and...

We’re into month eleven of COVID-19 vaccinations globally and eight months into the Australian process, where we’ve continued to see a ramp-up in local supply allowing for quicker vaccination progress. The good news is that the end is coming into...

Evergrande has received significant attention in mainstream press over the past few weeks, as its potential default has spelt concerns of “contagion” throughout the global economy. The next chapter of Evergrande’s story is yet to be determined, as the world...

The USA’s working age population has grown over the past decade, yet the amount of people participating in their labour market has fallen. Why is that? The answer is subtle: where there are over 24 million Americans that share this...

Our title says “non-standard” but it could just as easily have said scathing or blistering, as a US Federal Reserve economist has written and published an academic discussion paper that seeks to refute all the recent policy responses from the...

Most federal elections influence financial markets, owing to the sweeping changes often made to fiscal and sometimes monetary policy by newly elected political parties and their leaders. This fact is especially pertinent for elections over the next year, where governments...

Hyperloop is set to be the first new form of mass transportation humankind have developed in nearly 70 years, revolutionising the way we travel – and subsequently the way we live. Current forms of transport require us to live in...

In March, we wrote about China’s 14th Five Year Plan, and identified 8 key areas worthy of note and mostly likely to be impactful to investment portfolios. Three of these areas were tech, healthcare and education, where we warned of...

Specialisation and centralisation have played a key role in global capital markets, where only regulated exchanges and counterparties have been able to facilitate the purchase and sale of assets. However, as blockchain technology has developed and gained more mainstream acceptance,...

We’re into month ten of COVID-19 vaccinations globally and seven months into the Australian process, where at present, a large number of Australian residents are in lockdown or working from home to avoid the spread of the delta variant. The...

Gold has long played a role within utility maximising portfolios – given its ability to diversify and reduce volatility. During last years market crash, gold was able to outperform the S&P500 by 30.6%, however outside of its qualities as a...

We can learn a lot about investing from analysing piles of sand. As children, many of us are lucky to go to the beach as one of Australia’s favourite pastimes, where many of us have built small structures out of...

Describing inflation as “transitory” has to be one of the most annoying terms a central banker can use for investors, as it offers no insight into the time-frame that inflationary pressures will be felt. A 6 month spike in price...

Unconventional central bank monetary policy has similarities to driving a car, we aren’t kidding. In recent client conversations, discussions regard central bank “tapering” of unconventional policy initiatives of 2020 have ranged from those thinking tapering will cause volatility and panic...

In the 6 weeks since our last COVID-19 vaccination update, there has been an additional 1.04 billion vaccines administered across the globe, where approximately 16% of the human population had received at least 1 dose of various vaccines. Our National...

A key reason to draw parallels between our current markets and the situation immediately following the GFC is a term that has been floating around financial media over the last few months of a “taper tantrum”, in relation to if/when...

Capital markets exist to improve transactional efficiency, providing a venue to allow the transfer of capital between those who possess it, and those who demand it. Whilst capital markets have enabled economic advancements which have significantly enhanced our standard of...

The most recent US White House Budget has no budget surpluses forecast for the next decade, likewise in Australia, there’s no budget surplus forecast until 2031/32 fiscal year. This begs the question how governments are proposing to finance these deficits...

We are now into month seven of COVID-19 vaccinations globally, and month four in Australia. Our pace of domestic vaccinations has improved, though still below the original, revised and current target rates for inoculation. However, we are speeding up with...

In 2002, US Secretary of Defense Donald Rumsfeld answered a question by talking about known unknowns and unknown unknowns, events we know but happen but can’t accurately forecast them, and events that happen out of the blue that can’t be...

With the new year came a new US administration in the White House, where President Joe Biden has since divulged foreign policy priorities, amid the backdrop of rising tensions between the US and China centred around flashpoint issues such as...

The RBA is trying its utmost to provide clear and concise publications that state their policy objectives, and how they’re attempting to reach them. What they’re doing is making it easy for households, businesses, investors etc to get ahead of...

Elon Musk’s recent tweets over the environmental sustainability of Bitcoin have sparked a debate regarding the ESG credentials of Bitcoin, and whether or not it is an appropriate allocation of resources or capital. Whilst some market participants will happily declare...

Quantitative factors were once the realm of statisticians and hedge funds, where they’re grown in popularity and accessibility in recent years, and speaking about “growth”, “quality” or “momentum” factors has become commonplace. In short, “factor” based investments seek to isolate...

In 1991, the total value of Japanese real estate was estimated to be USD $20 trillion, 5 times that of the entire US and making up 20% of the world’s wealth. Since the collapse of their real estate and equity...

We are now into month six of COVID-19 vaccinations globally, and month three in Australia. Our pace of domestic vaccinations has improved, though is well below the original, revised and current target rates of inoculation. This presents the shifting economic...

As with all Federal Budgets, there are winners and losers, where during election years, the incumbent government usually seeks a higher spending agenda to create the optic there’s more winners than usual, and they’re looking out for everyone. In that...

In Australia and across the world, we’re seeing higher prices in pet food, corn, wheat, timber, iron, copper, bitumen, housing, accommodation, yet we’ve only seen muted inflation data thus far, as measured by Consumer Price Indexes (CPI). This made us...

Soft commodities generally refer to agricultural goods that are grown, rather than extracted from the ground. “Soft” referring to the tensile strength in comparison to harder commodities such as gold, platinum (precious metals) or iron, nickel and cobalt (industrial metals)....

Many phrases are thrown around markets, with varying origins and use cases. In today’s slightly lighter note, we will go over some of the more commonly used terms and expressions in the industry, ranging from a “dead cat bounce” to...

When people talk about the technologies which will define our future, one name always pops up – Artificial Intelligence (AI). Whilst it may be difficult to distinguish, AI already plays a role in many facets of society, with its influence...

We are now into month five of COVID-19 vaccinations globally, and two months into the inoculation process in Australia, a month since our last update. On 22-Feb: there were 186mln doses administered worldwide across 82 different countries, at a run-rate...

Recently we were analysing the trading patterns in Bitcoin relative to more mainstream assets, such as the Australian dollar and Japanese Yen currency cross-rate (AUD/JPY). What we found was that Bitcoin DOES have an effect on AUD/JPY – who would’ve...

If there is anything that central banks have learned – especially our RBA – is that monetary policy is more effective when it is transparent and easily understood. Furthering this agenda, the RBA has published a discussion paper that details...

One of the tell-tale signs of the US housing bubble and the subsequent subprime mortgage crisis and credit crisis – later labelled the Global Financial Crisis or Great Recession – was a surge in house prices that peaked in 2006,...

The world is now into month four of COVID-19 vaccinations, and we’re one month since starting the inoculation process in Australia.  It’s also been one month since our last update. On 22-Feb: there was 186mln doses administered worldwide across 82...

Title: The USA’s New Plans for Asia Pacific While financial markets have been focusing on; bond markets sell offs,equity market earnings season,COVID-19 vaccine rollouts,cryptocurrency developments, the United States has been rolling out a comprehensive strategy against China and has been...

By now, we are all used to hearing the same old stories – growing COVID-19 infections, the U.S. government’s newest stimulus bill, and the price of Bitcoin going up. Whilst cryptocurrencies have been around for 10 years, several structural tailwinds...

International Women’s Day (IWD) is not new. Its origin dates back to February 28th 1909, thanks to the Socialist Party of America in New York City. Attendees cited the need for a reoccurring and more formalised event with credit to...

Investor interest in cryptocurrencies, both from institutions and investors, has exploded over the past six months. Although cryptocurrency has been an existing asset class for over a decade, its renewed public profile makes it important for investors to gain a...

The human brain is a funny thing. There is a psychological phenomenon called the mere-exposure effect, a type of familiarity bias, where people tend to develop a preference for things merely because they are familiar to them. In investing, this...

Cryptocurrencies are the talk of the town, with their total market capitalisation increasing from $344 billion USD on the first day of October 2020, to $1.46 trillion USD as of the 24 February 2021, representing a 324% increase over just...

Yesterday I had the opportunity to speak at the Institute of Managed Accounts Professionals (IMAP) conference, held in Sydney. First and foremost, I would like to thank IMAP for the opportunity to attend and speak to the large cohort of...

The world is now into month three of COVID-19 vaccinations, with over 186 million doses administered worldwide, across 82 different countries, at a rate of 6.34 million doses per day at the current run-rate. Unfortunately for Australians, we are not...

Prelude In order to provide you daily content in our morning notes, we are usually organised ~2 weeks in advance with lists of topics and thematics that we hope will resonate with you. Originally, I had planned to write this...

Australia’s economy has fared relatively better than most other Western economies throughout the ongoing COVID-19 pandemic. This is due to many factors: our isolation being an island nation that is far from many other global trading hubs; fiscal and monetary...

Happy New Year and welcome to our first daily morning note of calendar year 2021! We hope that you all had a lovely holiday period and are rejuvenated for the year ahead. Our last morning note was published on 18...

Today is the last note of the year.We’ll return to publishing our daily content on 1 February 2021. First and foremost, thank you for your support this year – reading our publications, utilising our platform and investment service, participating in...

The imposition of COVID-19 on societies across the globe may have lead investors to doubt the future prospects of commercial property, while the opposite has occurred in many nation’s residential property markets, as the rise of working-from-home arrangements has re-emphasised...

The American pharmaceutical firm Pfizer, in collaboration with German firm BioNTech, surprised the world when it announced their coronavirus vaccine showed 90% efficacy in preventing COVID-19. Days later, another American firm, Moderna, announced their vaccine has nearly 95% efficacy. Shortly...

RBA Governor Philip Lowe attended the Committee for Economic Development of Australia (CEDA)’s annual dinner on Tuesday evening. The topics he spoke about are not only important to us for their investment implications, but also to understand what policies one...

The Reserve Bank (RBA) met yesterday and while the market predicted most of the resulting change in monetary policy setting, the Bank did provide some unexpected surprises. The point of policy In our missive on 26 October, we sought to...

In advance, thank you to Brent Donnelly at HSBC for the two charts and providing the link to the BBC news article. "Past performance does not indicate future performance." You may have seen this statement or a similar one on...

Monetary policy has become less clear, despite central banks stated desire to promote stability and transparency. It used to be that looking at the RBA’s cash rate target and charting the yields of ASX-listed bank bill futures would provide a...

I’ve used a provocative title today, but the question has been asked of me more and more in recent weeks - where government expenditure as a ratio of our overall national output (spending/GDP) is growing to higher and higher levels....

The price of goods, services and financial assets determine our ability to consume or invest in them. If prices increase and our income does not, then we need to reduce our ability to consume or invest. In terms of goods...

On Tuesday evening, Commonwealth government Treasurer Josh Frydenberg delivered the 2020-2021 budget (delayed since May) which was brimming with a mix of measures designed to boost near-term demand as well as lift longer-term growth and economic output. The latter, the...

The market is now pricing in a cut to the Overnight Cash Rate (OCR) from 0.25% for the RBA’s October 6th meeting, with potential to change other policy measures as well. Let’s take a look why. The Australian Economy and...

Ngilondoloze (Guard me) Uhambe nami (walk with me) Jersulame ikhaya lami (Jerusalem is my home)               Master KG [2020] Today marks the vernal equinox so a happy first day of spring for all of us reading in the southern hemisphere....

There’s a lady who’s sure, All that glitters is gold And she’s buying a stairway to Heaven               Led Zepplin (1971) Last Wednesday, I wrote this note about how central banks are providing so much liquidity in an attempt to...

“People say I got a drinkin’ problem But I got no problem drinkin’ at all They keep on talkin’ Drawing conclusions They call it a problem, I call it a solution”               Midland (2017)   My song and band reference...

Today, I want to talk about the Autumn of ’68 in the USA.  While not as catchy as Bryan Adam’s “Summer of  '69”, the US Autumn of 1968 was quite a notable period, but for all the wrong reasons. Calendar...

Each year there is a large gathering of economists, financial market participants, academics, US government officials in Jackson Hole, Wyoming (USA), to discuss long-term economic policy issues of mutual concern. All the papers are available online. This year’s meetings occurred...

Understanding the difference between risk and uncertainty is crucial in every aspect of investing. A decision involving risk lends itself to statistical analysis and econometrics, particularly if the opportunity or idea is common, and the event re-occurring. On the other...

On 1 July 2020, Indonesia’s central bank closed an agreement with the government to fund $40bln USD at zero% interest rate, to fight the coronavirus pandemic. This is the largest debt monetisation program among emerging market nations so far. While...

Just to see you smile, I’d do anything, that you wanted me to, And all is said and done, I’d never count the cost It’s worth all that’s lost                 Tim McGraw (1997)   Today’s note is several weeks in...

Want to hear a bond market joke? Q: What do you call Canada after having its credit rating cut from AAA to AA? A: Canad Thank you, I’ll be here all week. On to the note – last week Tuesday...

I don’t have a song for you today – nothing really fits the brief. I want to use today’s missive to talk about the economic term “creative destruction” and the inference that the US Federal Reserve has investors backs and...

“And we’re falling all over again, Like a flashback to way back when, Back when we were us.” Luke Combs (2019) It is becoming a consensus view that an Australian economic recovery, as well as a global recovery, hinges upon...

“And if you said this life ain’t good enough, I would give, my world, to lift you up I would change my life, to better suit your mood” Santana ft. Rob Thomas – Smooth (1999) 32.9 million Americans received some...

“Don’t call it a comeback, I’ve been here for years” LL Cool J (1990) I set aside time each week in my “reading time” to peruse theories that I disagree with. I believe this is key in mitigating confirmation bias...

Today I would like to take the opportunity to talk about Modern Monetary Theory (MMT), which is a recent socio-economic view stemming from the 1990s. It may be surprising to know that MMT as a standalone concept was developed originally...

The phrase “throwing everything but the kitchen sink” gained popularity during World War II when it was delivered to describe using every possible weapon or methodology against the enemy in order to beat them. We use this phrase liberally in...