Hi, I’m Joel Grosvenor, portfolio manager at Morningstar Investment Management. This is the Morningstar Market Minute, a brief video series we release every Friday where we cover all the things that have happened in the market over the last week and any changes that we’ve made to our portfolios.

The week started off with a significant increase in the conflict within the Middle East. This led to some price rises in oil. Investors were rightly concerned that if this were to continue, it could bring about higher rates of inflation and potentially impact global economic growth.

In the background, several central banks met to discuss interest rates. The Bank of Japan and the US Federal Reserve were among them, and both, to no one’s surprise, maintained interest rates at current levels. Both banks are watching for the potential implications of trade tariffs, prices, and inflation before making further adjustments to their policy rates.

Unfortunately, given the evolving nature of many of these trade deals—and some behavior we’ve seen from both companies and consumers bringing forward purchases in the first quarter—it may be some time before we know the true impact of trade tariffs on prices and inflation.

Back home in Australia, the market traded sideways for most of the week. The energy sector stood out, with a takeover bid for Santos (ASX:STO) lifting the entire sector. That, combined with rising oil prices, led to strong performance from other companies like Woodside (ASX:WDS).

In terms of our portfolio, one change we made this week was within our global equity allocation, specifically around Korean equities. Korean equities have performed quite well this year, mainly due to strength in defense and semiconductor stocks. Companies like Samsung (XKRX:005930)—more commonly known for smartphones, TVs, and appliances—are also key players in providing components to the AI industry. In Australian dollar terms, that market is up well over 20% so far this calendar year.

While we still find the market relatively attractive from a valuation perspective, we’ve taken this opportunity to trim back some of our exposure and reallocate into defensive assets like international fixed interest.

That’s all for this week. Check back next week for the next Market Minute to stay informed.