Key Points: • Polling and betting markets suggest the Republicans are very likely to lose control of the House in November, with around a 40% chance they lose the Senate as well. • History suggests a divided government is irrelevant for markets. Returns under divided government are statistically indistinguishable from those under unified control. As are returns around midterm election periods. • Our base case for the final two years of this administration is noisy but more

Key Points: • Despite some green shoots late last year, the Australian economy has again turned a corner for the worse, with inflation too high and the RBA again raising rates as a result. • We think excessive government spending, lack of economic reform and too much regulation are key drivers of this outcome. • The recently released budget does little to solve this malaise and therefore we are happy to remain underweight Australian equities in a rising interest rate and sogg