Australian equities remain under pressure from a deteriorating macroeconomic backdrop, elevated inflation and a central bank that knows it must get inflation back to the low end of its target 2-3% range. We have argued against a catch-up trade for the equity market and we reiterate our stance - Australian underperformance is likely to widen not contract in coming months. It remains premature to position for the next upswing and an easing in policy rates. Patience is required.
