Skip to main content

1. Home is where the office is…

Over 20,000 bankers, traders and other workers have reportedly turned their offices into their home this week, as Shanghai went into strict Covid lockdowns. Some 23 Chinese cities are under total or partial lockdown currently, affecting an estimated 193 million people in areas accounting for 22% of their GDP.

As a result of the lockdowns:

  • Port cargo volumes have dropped by about a third since March 12, with increased safety measures incorporated
  • Flight activity into Shanghai Pudong airport was just 3% of its rate last month
  • Trucking services in and out of Shanghai are down an estimated 30%.

Source: Vessels Value

2. Bill shock

A surge in coal and gas prices, partly due to sanctions on Russia, has driven wholesale electricity prices through the roof. It is interesting to note that wholesale prices make up 40% of a retail bill. Industrial users even more so. Wholesale electricity prices in NSW have almost doubled versus a year ago, while VIC prices are up around 50%. This is pushing the earnings pendulum further towards commodity owners and away from commodity users.


NSW electricity baseload futures prices

Source: AEMO, Bloomberg

3. Jobs are tight

The ratio of job vacancies to unemployed persons is at very high levels across all states in Australia. Since the 1970s there had been a relatively consistent relationship between the job vacancy rate and the short-term unemployment rate. Until now. More signs of how tight the labour market is. Check out the Chart of the week video below to hear some potential implications.

Source: ABS, Seek, Macquarie Macro Strategy​​​​


This article is prepared by Firetrail Investments Pty Limited (‘Firetrail’) (ABN 98 622 377 913, AFSL 516821) as the investment manager of the Firetrail Australian High Conviction Fund (ARSN 624 136 045), the Firetrail Absolute Return Fund (ARSN 624 135 879), the Firetrail Australian Small Companies Fund (ARSN 638 792 113) and the Firetrail S3 Global Opportunities Fund (ARSN 653 717 625) (‘the Funds’). Pinnacle Fund Services Limited ('PFSL') (ABN 29 082 494 362, AFSL 238371) is the product issuer of the Fund. PFSL is not licensed to provide financial product advice. PFSL is a wholly-owned subsidiary of the Pinnacle Investment Management Group Limited (‘Pinnacle’) (ABN 22 100 325 184). The Product Disclosure Statement (‘PDS’) and Target Market Determination (‘TMD’) of the relevant Fund are available via the links below. Any potential investor should consider the PDS and TMD before deciding whether to acquire, or continue to hold units in, the Fund.

Links to the Product Disclosure Statement: WHT3810AU, WHT5134AU, WHT3093AU, WHT7794AU

Links to the Target Market Determination: WHT3810AU, WHT5134AU, WHT3093AU, WHT7794AU

For historic TMD’s please contact Pinnacle client service Phone 1300 010 311 or Email

This communication is for general information only. It is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. It has been prepared without taking account of any person’s objectives, financial situation or needs. Any persons relying on this information should obtain professional advice before doing so. Past performance is for illustrative purposes only and is not indicative of future performance.

Whilst Firetrail, PFSL and Pinnacle believe the information contained in this communication is reliable, no warranty is given as to its accuracy, reliability or completeness and persons relying on this information do so at their own risk. Subject to any liability which cannot be excluded under the relevant laws, Firetrail, PFSL and Pinnacle disclaim all liability to any person relying on the information contained in this communication in respect of any loss or damage (including consequential loss or damage), however caused, which may be suffered or arise directly or indirectly in respect of such information. This disclaimer extends to any entity that may distribute this communication.

Any opinions and forecasts reflect the judgment and assumptions of Firetrail and its representatives on the basis of information available as at the date of publication and may later change without notice. Any projections contained in this presentation are estimates only and may not be realised in the future.

Unauthorised use, copying, distribution, replication, posting, transmitting, publication, display, or reproduction in whole or in part of the information contained in this communication is prohibited without obtaining prior written permission from Firetrail. Pinnacle and its associates may have interests in financial products and may receive fees from companies referred to during this communication.

This may contain the trade names or trademarks of various third parties, and if so, any such use is solely for illustrative purposes only. All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with, endorsement by, or association of any kind between them and Firetrail.