Aussie equities: Morgan Stanley cautiously bullish

** Morgan Stanley is cautiously bullish on Australian equities, reflecting a good macro-economic environment

** Australia's benchmark index, XJO is currently up 0.8% and has gained 1.8% for the year so far, as of last close

** MS's caution stems from company valuations that are not cheap and an uncertain outlook after year-end

** Says a clearer path of disinflation, growth and policy over the next few months is expected to establish a constructive outlook across markets

** Says momentum remains strong and markets prefer a weaker macro and inflationary backdrop