In our most recent monthly Harbour Outlook we set out our core view. [1] Markets have experienced goldilocks conditions over the past 5 years, with solid economic growth, low inflation and low interest rates. Through 2018 we have seen growing signs of a transition from this backdrop. In New Zealand, for example, growth appears to be moderating as capacity constraints bite in some sectors, while wages and cost pressures are emerging from a very low base. After being spoilt by a period of unusually low volatility for many years, markets have become choppier in 2018. Looking forward, we expect this to continue into 2019, as market volatility reverts to more normal levels.