3rd March 2026

We’ve been working through a revamp of our email and written content this year, with a simple aim: to focus more clearly on what matters to our clients and readers. 

Over time, it’s become clear that people engage with our content in different ways. Some of you prefer a simple, easy‑to‑read summary of what’s been happening in markets. Others enjoy taking the time to work through the detail of our Macro Tones page, which pulls together a wide range of research, commentary and observations that we think are relevant to portfolio thinking. 

With that in mind, we’ve decided to combine the two.

Going forward, What Caught My Eye will begin with a clear summary of the themes we’ve been focused on ourselves, followed by a link to Macro Tones for those who want to explore the detail in more depth. 

Here’s What Caught My Eye recently…

Over the past week, and particularly over the last few days, geopolitics has overtaken economic data as the dominant driver of markets. The escalation in the Iran conflict marks a clear shift from the environment we were discussing earlier in the year, where inflation trends, growth momentum and central bank policy were the primary focus.

What stands out this time is not just the rhetoric, but the direct impact on energy supply and global logistics. Disruptions to LNG production, rising uncertainty around shipping routes through the Strait of Hormuz, and increasing insurance and freight frictions have introduced real constraints into energy markets. Even without outright production shutdowns, these pressures tighten supply and push energy prices higher.

Why this matters is that energy is a core input into almost everything else in the economy. Higher oil and gas prices don’t just affect petrol bills. They flow through to:

• fertiliser and agricultural inputs,
• food production and distribution,
• manufacturing and packaging,
• transport, freight and logistics,
• and ultimately the prices of goods and services consumers face day‑to‑day.

This is why energy shocks have an outsized impact on inflation. They work their way through supply chains with a lag, lifting costs broadly and making inflation harder to bring down, even if demand itself is slowing.

Markets have responded accordingly. Energy prices have moved higher, gas markets have been particularly sensitive, and refined products such as diesel and jet fuel have outperformed crude. Gold has also risen sharply, reflecting renewed demand for defensive assets, while bond markets have become more reactive to geopolitical headlines than to incremental economic data.

The broader macro implication is a less comfortable mix than we were discussing in February. Alongside still‑resilient growth, upside inflation risks via energy have re‑emerged at the same time as downside growth risks increase if disruption persists. This complicates the policy outlook and challenges the simplicity of the soft‑landing narrative that had been gaining traction. 

In Australia, this shift adds another layer of complexity. Inflation has already proven sticky, labour markets remain tight, and energy‑related price pressures raise the risk that monetary policy stays restrictive for longer than markets had previously assumed. While this is not our base case, the range of potential outcomes has widened.

From a portfolio perspective, one thing that caught our attention is how traditional diversification has been less reliable in recent weeks. Correlations have behaved inconsistently, with some defensive assets moving alongside risk assets rather than offsetting them. In this environment, quality, resilience and balance‑sheet strength matter more than precision forecasting.

The key takeaway for us is that geopolitics is no longer a background consideration. For now, it has become a structural input into the macro environment. While our base case remains that disruption is contained rather than systemic, markets are rightly assigning greater weight to tail risks.

For those who would like to explore the underlying commentary and source material behind these observations, you can contact me for the live link to our latest Macro Tones.

— Scott

Disclaimer: This is general information only and doesn’t consider your personal situation. Please consider seeking personal advice from a licensed financial adviser before making financial decisions about your future.