Australian equities were a near-total anomaly in global markets last month, thanks to ongoing demand for our commodities as the Russia-Ukraine conflict intenstified. Global equities sank in the three months to March and bonds didn’t perform much better either even in the face of rising real and nominal yields.

Within the Australian equity universe, being long energy and short technology was the place to be. Outside of the listed market, cash and floating-rate notes performed the best.

The biggest development during the quarter was the Russian invasion of Ukraine. Our central point is that even in a period of extreme uncertainty, markets will look for a ‘de-escalation’ scenario and we would see a short risk reversal. And a lot of this has played out mostly to script.

But what happens now? In our latest update, Tim Toohey, Yarra Capital Management’s Head of Macro and Strategy, reflects on his four Russia-Ukraine scenarios and details his three key themes for the June quarter (hint: higher inflation is a fait accompli).