While there is always something to discuss each quarter, markets are dishing up more conversation topics than usual. We provide our usual economic and investment commentary, with a focus on property, mounting risks in China and potential for ‘The Great Resignation’.

Our investment views remain aligned to those outlined last quarter, despite investment risk sentiment appearing to have increased. We share some out of favour views on cryptocurrencies and finish up this quarterly edition with some insurance industry specific news.

This quarterly provide an economic commentary in three parts.

• We discuss stimulus settings in ‘Threading the needle’

• Delve into inflationary expectations in ´Inflation - headache or head fake?’, and

• Round up the discussion in ‘Rotation of risk’.

We finish with a brief overview on how we view investment allocations.

COVID has impacted labour markets in a variety of ways. Economists assume, perhaps correctly, that full employment (NAIRU) is closer to 4% than the historical 5%. But, what if rapid shifts in market functions have seen the non accelerating inflation rate of unemployment drift higher? We explore the idea that full employment might be closer than we think.

This quarterly discusses the increasing dislocation between the economy and investment markets. We dig into the machinations of quantitative easing and some of the adverse outcomes this has delivered. The quarterly then moves into an investment update, finishing off with how we are positioning portfolios.

Central Bank and Government Fiscal policy decisions are now one of the key determinants of shor. The scope for investors to continue to generate historically attractive returns from the current elevated asset prices has diminished. However, the prospect of not investing is equally unattractive.

The year ahead sees markets performing a high wire act, with central bankers and politicians holding opposite ends of the wire. We discuss the perilous journey facing investors below.

Noisy, chaotic, uncertain, bifurcated… Finding the right words to describe the economic landscape is about as difficult as moderating a petulant 2-year-old.

This quarterly seeks to provide some insight into what is happening in the world of economics and investing

The increased level of government debt has skewed how monetary policy influences capital flows and inflation.

Further, the intermingling of central bank and government finances, where central banks now underwrite government debt through the creation of money, further limits central bank capacity to target traditional inflation goals.

This article explains how we think central banks will have to adept their policy settings.