RBA’s rate hold looks even more certain amid $10tn market rout
Peter Hannam
The Reserve Bank’s two-day board meeting that wraps up this afternoon was very likely to have left the key interest rate unchanged for a sixth straight gathering even without the sudden burst of global market mayhem.
The downward spiral in equity markets became evident to most Australia investors last Friday, or about the time the RBA was finalising forecasts for its quarterly statement on monetary policy that will inform the rates verdict we’ll all learn about at 2.30pm AEST.
The unwinding of big bets on artificial intelligence and US tech titans such as chipmaker Nvidia began, though, about three weeks ago. Over that time, stock markets had shed $US6.4tn in value, or about $10tn in Australian dollars. (That looks like $10,000,000,000,000.)
The RBA governor, Michele Bullock, will probably be asked why the RBA isn’t cutting its cash rate of 4.35%, where it’s sat since November. It will be interesting to hear whether the board considered such a move along with the “hike” or “hold” options. (We looked at those two options here yesterday.)
Bullock is likely to say the central bank is watching market developments closely, and the RBA has the capability to intervene to cut the cash rate to support the economy or to purchase Australian dollars if the currency goes into a tailspin (and fuels inflation as import prices rise). (The dollar is holding steady at about $US65 US cents so far.)
Markets that were tipping a rate rise before the end of the year now predict a 20% chance of rate cut today, and about 60% of 50 basis points of cuts to 3.85% by December.
Uncertainty is likely to be word of the day, whether it’s sliding markets, a potential escalation of war in the Middle East, and who knows what in the US presidential campaign over the next three months as election campaigns ramp up.
Key events
Wong responds to Israeli embassy comments following review into aid worker killings
Daniel Hurst
In Washington DC, Penny Wong was also asked for her response to the Israeli embassy’s statement yesterday. This all stems from a review of the killing of the Australian aid worker Zomi Frankcom and six of her colleagues in Gaza by Israeli drone strikes on 1 April.
To recap: The former Australian defence force chief Mark Binskin – in a report that the Australian government released on Friday – found the Israeli military’s controls failed, “leading to errors in decision making and a misidentification, likely compounded by a level of confirmation bias”.
But Binskin said he did not believe the strikes were “knowingly or deliberately directed against” the World Central Kitchen.
When Wong, the foreign affairs minister, released the report on Friday, she said the deaths of Frankcom and her colleagues were “inexcusable” and that they “were killed in an intentional strike by the IDF”.
An Israeli embassy statement on Monday took issue with how the Australian government had characterised Binskin’s findings. The embassy said the Australian government’s statement “regrettably included some misrepresentations and omitted crucial details with respect to the manner in which the report was conducted, the degree of cooperation and openness exhibited by the IDF, and even with respect to certain aspects of the tragic incident itself”.
Wong told reporters in Washington DC early this morning:
I will say that people can read the report for themselves, and the IDF itself has taken responsibility, including for what it has said is a grave mistake and a failure to follow rules of engagement. Those are not my findings; they were the findings of the Israeli Defence Force.
Wong says she is ‘deeply concerned’ about escalation in ‘highly risky’ Middle East
Daniel Hurst
Let’s bring you some more comments from Penny Wong’s press conference in Washington DC early today Australian time.
The foreign affairs minister, when asked for her assessment of the security situation in the Middle East, reiterated her existing calls for Australians to leave Lebanon:
The security situation in the Middle East is highly risky.
Wong noted that she had recorded a video last week calling on Australians to leave Lebanon:
We didn’t do that lightly; we don’t do that lightly. We do that because we are deeply concerned about the possibility of conflict, escalation. It’s something we’ve been worried about, all of us have worried about since the October 7 attacks.
We know what has occurred in recent times. We know that the number of Australians who are in Lebanon and how difficult it would be for those Australians to be assisted in numbers, particularly if Beirut Airport closes. So, I again say to people, if you are in Lebanon, leave now while you still have options to do so. If you’re thinking of travelling to Lebanon, do not.
Australia joins US-led Landsat Next satellite program
More announcements are coming out of the US, with Australia officially joining the Landsat Next satellite program.
The foreign affairs minister, Penny Wong, is in Washington, and has made a series of announcements alongside the US secretary of state, Antony Blinken. This included news Australia would join the Global Entry program from next year.
The US-led Landsat Next satellite program, which Australia has joined as a core partner, will map the Earth’s surface and support mining exploration, environmental monitoring, agriculture and disaster management.
The program is set to launch in 2031. Under the Landsat Next agreement, Australia will commit $207.4m over the next four years for Geoscience Australia to develop advanced processing and analytics capabilities.
The funding will also provide essential support to the mission through upgraded ground station capabilities in Alice Springs. Wong said:
The satellite data delivered through this partnership will not only be of benefit to our two countries, but its critical insights will help the Indo-Pacific to optimise food security and agricultural production, improve urban infrastructure planning, and prepare for disasters.
Bird flu fears for Australian species
Lisa Cox
The environment minister, Tanya Plibersek, says the government is worried a deadly strain of bird flu will put some Australian bird species at risk of extinction.
In a speech to the Zoo and Aquarium Association conference, Plibersek said “the new H5 variant is coming for us”. The highly pathogenic H5 bird flu strain has wreaked havoc on bird and other wildlife populations globally but has not yet been detected on Australian shores:
We are worried about the extinction risk of birds that are in captive breeding programs, where numbers are already critically low in the wild and there’s little capacity to cope with a new disease.
We are also worried that species in the wild that are currently doing well – or travelling along OK – will become vulnerable to extinction due to mass deaths.
Plibersek said the government was taking the risk seriously and there needed to be an “all-in” approach with different levels of government and private organisations working together to try to minimise the threat:
Avian influenza doesn’t just impact birds. It’s also impacting mammals overseas. We know that seals and sea lions are at particularly high risk. The spring bird migration from the northern hemisphere in the coming months is a particularly dangerous time.
Australian share market edges lower amid US recession fears
Jonathan Barrett
The Australian share market has opened slightly down on Tuesday, extending a US-led global sell down marked by growing recession fears in the world’s biggest economy.
Australia’s S&P/ASX200 index was trading at 7,630 shortly after trading commenced, down 0.25% from yesterday’s close.
The weaker opening comes after the benchmark index shed 5.8% over two volatile days that have erased $160bn of value from shares. The index is now flat for the year.
Investors in the US, Europe and Asia have been unwinding their positions in response to weak US jobs data late last week that triggered a recession indicator, following a prolonged period of large gains underpinned by excitement over artificial intelligence and the wider tech sector.
The US Federal Reserve has also indicated it would soon start cutting interest rates, in a move that investors interpreted as a sign that the economy was weakening.
In response, so-called risk assets such as equities have been falling, while investors shifted their money into safe havens like bonds.
The market has, however, shown some signs of resilience, with chip maker Nvidia, as well as the Australian dollar, paring some of their sharp losses overnight.
This has raised questions among analysts over whether a market crash is taking hold, or if it’s an overdue pullback after a period of strong returns.
Russian-born Australian citizens have Brisbane apartment restrained after espionage charges
The Australian federal police has obtained court orders restraining the home and assets of two Russian-born Australian citizens, charged with an espionage-related offence last month.
On 2 August the Queensland supreme court made restraining orders over property owned by the married couple, valued in excess of $550,000.
The AFP alleges the 40-year-old woman, who is an army private in the ADF, and her 62-year-old husband, accessed sensitive ADF information with the intention of providing it to Russian authorities.
A Brisbane apartment owned by the couple is subject to the restraining order, as well as multiple bank accounts and the superannuation funds acquired by the woman during her employment with the ADF.
Restraining orders prohibit the disposal of, or any dealing with the property subject to restraint, unless authorised by the court.
The pair was charged in July with one count each of preparing for an espionage offence, which carries a maximum penalty of 15 years’ imprisonment. It was the first time an espionage offence has been laid in Australia since new laws were introduced in 2018.
Richmond player Dustin Martin retires after 15-year AFL career
Legendary Richmond player Dustin Martin has retired, effective immediately, following a 15-year AFL career. He informed his teammates of the decision today, and said:
It is hard to put into words what the Richmond Football Club means to me, I love this place so much. I will be forever grateful for the love and the support I have received from the people here.
To my teammates, the brotherhood that we all share is what I value most, as well as the bond with the staff and coaches… thank you to all of you. To my family and friends, thank you for your unconditional love and support.
To the Tiger Army, I have always felt loved and supported throughout my career, and for that, I will be forever grateful. The memories that we have created together will live with me forever. Thank you.
Martin played 302 games and booted 338 goals, making his debut for Richmond in Round 1 of his first season (2010). Richmond CEO, Brendon Gale, said it was hard to put into words the contribution Martin had made to the club.
Tensions arise in Northern Territory police in wake of apology to Aboriginal people
Lorena Allam
Tensions have already arisen in the NT police in the wake of the Northern Territory police commissioner Michael Murphy’s landmark apology to Aboriginal people delivered at the Garma festival on the weekend.
Last night, Murphy announced he had resigned his membership from the Northern Territory Police Association over its response to his speech.
Murphy said he was “incredibly disappointed” by the Association’s statements.
I love policing. I know you do too, and I am proud to be your Commissioner. I have a vision for the future of NT Police; and in order to achieve that future, we need to be able to understand and acknowledge our history. Our shared mission is to serve and protect all Territorians.
The NTPA had said they were “disappointed” that the Commissioner hadn’t communicated to them the “content, and intent, directly with the membership well in advance of his speech”. NTPA acting president Lisa Bayliss said:
In fact, the speech in its entirety was sent to the media before the membership. It is also not the role of police to assess the success or otherwise of federal government-directed policies of Closing the Gap, the Stolen Generation and the Intervention, as the Commissioner has done.
If the Commissioner is genuinely committed to achieving the goals he has outlined, it is essential that the entire Agency is included in this process and fully supported in its efforts to serve the community. Our members deserve the backing of the senior police executive, ensuring they are not unfairly overburdened with blame but rather empowered to continue their vital work for the benefit of all Territorians.
Day three of Reynolds-Higgins trial to begin in a few hours
Sarah Basford Canales
We’re heading into day three of Linda Reynolds’ defamation trial against her former staffer, Brittany Higgins.
The Western Australian supreme court will continue to hear the federal Liberal senator’s account of events following the alleged rape of Higgins in Parliament House in early 2019.
Reynolds told the court on Monday afternoon she had spoken with a “very upset” Higgins in the days following the incident but was not yet aware of a potential sexual assault allegation.
Reynolds is suing Higgins for a series of social media posts published in July 2023 she says damaged her reputation.
Reynolds’ lawyer, Martin Bennett, is expected to hand over the questions to the defence on Wednesday or Thursday for cross-examination.
Higgins’ lawyer, Rachael Young SC, has indicated she will seek to demonstrate Reynolds was aware of Higgins’ alleged rape by 1 April 2019 and that claims Higgins and her now husband, David Sharaz, concocted a conspiracy to damage her reputation are wrong.
We’ll update you in a few hours when the hearing begins.
Here’s a list of the Australian athletes to watch out for today, as we head into day eleven of the Paris Olympics:
Urgent push to overhaul men’s behaviour change programs
Court-ordered men’s behaviour change programs are littered with missed opportunities and must be urgently overhauled to boost engagement. That’s according to Monash University research, which found simply attending or completing courses should not be viewed as success.
As AAP reports, providing participants with ongoing support after courses end, collecting data on what happens to them, funding programs on a longer-term basis and boosting housing options for men who take part were identified as key areas to address.
Lead author Prof Kate Fitz-Gibbon said:
Men who do not have stable accommodation are more likely to skip group sessions and to exit the program early. It is then highly challenging to monitor and manage their ongoing risk where no fixed address is provided.
Fitz-Gibbon said there are mixed definitions of what success looks like and experts in the area called for long-term funding, as short term programs undermine the integrity and effectiveness of their work.
The current approach to working with men who use violence is missing opportunities to more effectively engage men in behaviour change, to keep their risk visible and to hold them accountable.
These missed opportunities represent critical moments where victim-survivor safety could have been improved.
Paul Karp
University sector blasts Labor for ‘draconian’ international student cap
Universities are speaking to the Senate education committee about the government’s proposed cap on international students.
Universities Australia’s chief executive, Luke Sheehy, said the bill is “rushed policy”, “ministerial overreach” and a “political smokescreen” designed to give the government the upper hand in “the battle over immigration ahead of the election”.
Sheehy said that “facts and data” don’t support claims international student arrivals are linked to the housing crisis, with higher vacancy rates around universities and international students making up just 4% of the private rental market. He said they are being made “scapegoats” for the housing crisis.
International students “accounted for more than half of Australia’s GDP growth [last year], almost single handedly saving from recession”.
The Group of Eight’s chief executive, Vicki Thomson, said the proposed cap was “draconian” and “economic vandalism”.
With immigration a “key battleground” between political parties, the university sector is “shaping up as the fall-guy”, she said.
Advocates to rally outside NSW parliament for accessible building codes
People with disability and advocates are set to rally outside New South Wales parliament today, calling to ensure new housing developments in the state are accessibly built.
According to Building Better Homes, NSW is one of just two states which hasn’t adopted the design standards mandated in the national construction code – requiring developers to include basic accessibility features, like a step-free shower and level entry to a home.
Campaign spokesperson Julie Charlton said the refusal of the state government to adopt the standards – which were a key recommendation of the disability royal commission – shows a “complete disregard for people with disability, older Australians, and others who require accessible housing.”
It’s not difficult or expensive to implement these standards but it would change the lives of people with disability and older Australians.
According to modelling from the Australian Building Codes board, the standards would add about 1% to the cost of a new build.
Advocates will rally outside NSW parliament at 11am and attempt to present government representatives with a signed open letter from hundreds of people with disability.
Lack of early social media regulation may have allowed easier radicalisation of young people: experts
Security experts say governments not regulating social media in its early years may have led to young people being more easily radicalised online, AAP reports.
Australian Strategic Policy Institute executive director Justin Bassi has said governments not enforcing social media in its early years had contributed to platforms not being regulated, allowing for the radicalisation to more easily occur. He told ABC Radio today:
These issues of people being angry, people being feeling disaffected, and people having a issue … have always been there. The advancement in technology and use of social media has a huge amplifying effect.
When social media was being developed, mistakes were made by democracies by not regulating early enough, not baking in security.
The question though now is how do you get that back? We’re so far down the line, people rely on the internet, rely on social media for their lives and livelihoods.
