Diana Mousina

As widely expected, the RBA cut the cash rate by 25bps to 3.6% today. With underlying inflation clearly inside the 2–3% target range and heading towards its 2½% midpoint, the need for restrictive monetary policy is dissipating. The updated inflation forecasts are largely unchanged but show a 2.5% at the end of the (extended) forecast horizon to December 2027. The RBA’s forecasts are predicated on further cuts to the cash rate as expressed by market pricing last week. The trough rate implied by this assumption is now sub-3%, consistent with our own view. In the press conference, the Governor did not rule out back-to-back cuts and emphasised that the MPB would take things meeting by meeting. The every-other-meeting pace implied by our own recent forecasts still seems a reasonable base case, though. The RBA has downgraded its near-term view of trend productivity growth, and hence GDP growth. Importantly, this does not imply a downgrade to the long-run trend. In addition, the RBA has moved away from its view of a year ago that slow productivity growth presented an upside risk to inflation. https://lnkd.in/g2CDM9Qv

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There are some significant structural changes going on in the world at the moment, with some meaningful implications for cross-asset price correlations. Here are the key takeaways from the note I wrote with Glen Bertram, Acting CIO for the JBWere and NAB Private Wealth CIO office (to get the full document, please contact your to your NAB banker or JBWere adviser). -We have written previously about the notion of regime change, and its utility as a framework in which to make sense of the many changes taking place across economics, politics and ultimately, financial markets. In our view, these shifts are both significant and likely to endure. -At the same time, the policy environment is changing too. Central banks are likely to face into both demand- and supply-side shocks in the new regime, which has different consequences for monetary policy. That this is occurring at the same time as central bank independence is being tested in some jurisdictions only amplifies the challenges. -One important consequence of these changes relates to the stability and directional characteristics of cross asset correlations. Many fundamental assumptions that investors and risk managers have taken as constant appear to be changing as we transition into a new regime. -In our view, this is consequential for both portfolio construction and risk management practices, and hence the topic of this note, jointly written with our colleagues in the JBWere & NAB Private Wealth CIO Office. -For portfolio construction, the most significant changes relate to correlations between government bond and equity market performance and AUD/USD and US equity market performance. These changes are likely to force (for local investors) a reassessment of optimal USD growth asset exposure and hedging levels, as well as a consideration of new or “alternative” defensive assets. -For other financial participants, there is much to absorb. At a minimum, the cost of hedging will rise, and scenario analysis will need to envisage a wider range of outcomes. A more de-synchronised global economy will influence cross market correlations and perceptions of both counterparty and sovereign risk.

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Airtree has officially closed its fifth fund at $650 million, with more than half the capital coming from global institutional investors. Despite the impressive number by Australian standards, partner James Cameron says the figure represents a deliberate decision to maintain fund size discipline rather than chase a mega-fund. "Fund size inflation can be the enemy of returns in venture and all of the big LPs internationally are very attuned to that," he told Capital Brief. Some of the previously identified backers of the fund include Harvard Management Company, the University of Wisconsin, and Chicago-based private equity firm Adams Street Partners. Read the full story by Bronwen Clune 👉 https://lnkd.in/gfTrdAED 

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How does NZ Super Fund harness the role of data analytics in machine learning, strategy testing, sustainability, and digital transformation? Data scientist Anastasia Moskvina shares the innovative approach taken by the New Zealand #sovereign fund, at this year's 11th annual [i3] Global Investment Strategy Forum https://lnkd.in/gmYteASh Kathryn A Kerner

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I’m delighted that my op-ed was published yesterday in the Australian Financial Review. A handful of global index providers dominate the benchmarks used by Australian super funds; charging millions in licensing fees that ultimately reduce member returns. This lack of competition means higher costs, less innovation and limited flexibility for funds to adopt better alternatives. Superannuation is compulsory. Members cannot opt out and trustees cannot escape the benchmarks against which they are judged. That makes it critical we shine a light on this issue and call for regulation that doesn’t entrench monopoly rents for private firms, but instead creates a contestable market that better serves investors. Thanks to the AFR for shining a light on this important issue. The link to the article is in the comments. Christine St Anne Stephanie Lerdall Amelia Furr Jonathan Morgan Ashley Wang, CIMA® Mark Hoven Luke Elliott Emma Roylett Mark McPhee Michelle Cameron Marco Bell Tom Raymond Mark Roomans Brian Cullen Julie Willoughby Kunal Kapoor Kate Parker (CIM) Chris Galloway, CFA Pankaj Parmar, CFA Frannie Besztery

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Australia’s 2035 climate targets are now set at 62–70%. We welcome this credible step, but the real test will be turning these targets into investment. Clear policy frameworks, alongside mainstream adoption of tools like the Australian Sustainable Finance Taxonomy, will give investors, lenders and other financial institutions the confidence to deploy capital at scale. These tools are critical to direct investment into the activities and assets that will support achievement of the 2035 target, while strengthening Australia’s long-term resilience and competitiveness. As Kristy Graham, CEO of ASFI, says: “A target in this range is credible, but the real test will be building the policy frameworks to turn ambition into investment and resilience.” "No matter the target, risks are already materialising. We must act by driving investment into climate mitigation, adaptation and resilience.” 📄 Read the media release: https://lnkd.in/gbqWUg5p #SustainableFinance #ClimateAction #ASFIMembers

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A great FY2425 for two of Pinnacle Investment Management Group’s Affilates - Firetrail Investments and Hyperion Asset Management Limited in Australian Small Cap Equities according to Mercer and The Australian Financial Review. For comparison, the S&P/ASX Small Ordinaries Total Return was 12.3% for the 12 months through June 2025. https://lnkd.in/ezYntr5P

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