Catholics get first American pope in Leo XIV

Good morning. Here's what happened overnight and what you need to know today.

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1.

Habemus papam: Cardinal Robert Francis Prevost, a 69-year-old Chicago native who spent his career ministering in Peru, has been elected the first American pope in the 2,000-year history of the Catholic Church. He will be known as Pope Leo XIV. A member of the Order of St Augustine, Prevost served as a missionary and bishop in Peru and led the Vatican’s powerful office that vets bishop nominations. He was brought to Rome by Pope Francis in 2023 and made a cardinal in early 2025. The conclave of 133 cardinals reached a decision in two days, after four rounds of voting. From the balcony of St Peter’s Basilica, Leo XIV greeted a crowd of more than 40,000 with the words, “Peace be with you,” and urged people to “build bridges”. Bells tolled in Lima as Peruvians celebrated his ties to the country, while US President Donald Trump called it a “Great Honor for our Country” in a social media post.(AP)(BBC)(Capital Brief)

2.

UK-US deal: Donald Trump announced a trade framework with the UK to be finalised in coming weeks, calling it a “breakthrough” and the first agreement since he imposed sweeping tariffs last month. Under the deal, the UK will export 100,000 cars a year to the US at a 10% tariff, down from 27.5%, and tariffs on steel and aluminium will fall from 25% to zero. The agreement also includes reciprocal market access on beef, with UK farmers receiving a tariff-free quota of 13,000 metric tonnes, and removal of the UK tariff on US ethanol. Rolls-Royce engines and parts will enter the US market without tariffs, and a UK airline will purchase USD10 billion in Boeing aircraft. The 10% baseline tariff on most UK goods remains. The UK and US will continue talks on pharmaceuticals, digital services and other areas. Trump and Starmer both called the deal historic, but many specifics remain unclear and negotiations are ongoing. (Capital Brief)(Bloomberg)(FT)(BBC)

3.

MD mandate: BlackRock is ordering its roughly 1,000 managing directors globally to return to the office five days a week, in the latest sign that large financial services groups are tightening flexible working policies. The Financial Times reported the world’s largest asset manager is expected to inform staff as early as Thursday (Friday AEST). BlackRock did not comment. In 2023, the company required staff to attend at least four days a week, but one of the sources told the paper the move may upset staff who are used to working from home one day a week. Chief executive Larry Fink has previously said he believes remote work can erode corporate culture. BlackRock joins JPMorgan, Goldman Sachs and others in curtailing flexible working. The firm has about 22,000 employees and manages USD11.6 trillion in assets. Meanwhile, a new report warned Wall Street bonuses will shrink in 2025, as trade tensions rattle markets and sour the outlook for bankers, fund managers and advisers.(FT)

4.

Cabinet cull: Attorney-General Mark Dreyfus and Industry Minister Ed Husic have lost their cabinet spots after Labor faction chiefs met on Thursday to allocate frontbench roles following the party’s election win. Husic was forced out after the Victorian Right, led by Deputy Prime Minister Richard Marles, demanded the NSW Right relinquish a ministerial position due to changed factional entitlements. Dreyfus was dropped by his own Victorian Right faction, also led by Marles. Prime Minister Anthony Albanese appears unlikely to intervene, with one Labor MP telling Capital Brief: “The numbers are the numbers.” Paul Keating called the sackings “poor judgment” saying the sacking of Dreyfus, who is Jewish, and Husic, a Muslim, by “factional lightweights” sent the wrong message. Sam Rae and Daniel Mulino are expected to replace the two ministers. Meanwhile, Jacinta Nampijinpa Price confirmed her defection from the Nationals to the Liberals and is tipped to run as deputy to Angus Taylor in the leadership race against Sussan Ley. (Capital Brief)

5.

Gates unloads: Bill Gates pledged to give away USD200 billion — 99% of his fortune — before shutting down his foundation by 2045, and separately accused Elon Musk of driving aid cuts that have led to preventable child deaths. The commitment accelerates earlier plans to wind down the Gates Foundation after his death. “There are too many urgent problems to solve for me to hold onto resources that could be used to help people,” Gates said. The foundation, which has already disbursed USD100 billion, will double its historic outlay over 20 years. It will focus on reducing childbirth deaths, eradicating infectious diseases, tackling poverty, improving US education and addressing climate change. In media interviews, Gates told Bloomberg that Musk-led USAID cutoffs have driven “a dramatic increase in childhood death,” and told the Financial Times that "The picture of the world's richest man killing the world's poorest children is not a pretty one." (Capital Brief)(Gates Foundation)(Bloomberg)(FT)

6.

Deal cheer: US stocks rallied on Thursday as investors cheered a new trade agreement between the US and the UK, as US President Donald Trump said weekend talks with China could lead to tariff cuts. Boeing shares rose 4.2% after officials said the UK committed to buy USD10 billion worth of aircraft, and airline stocks jumped as Rolls-Royce plane parts were exempted from tariffs. The Dow was 1.30% higher in late trading, the S&P 500 1.27% and the Nasdaq 1.85%. Semiconductor stocks also rose amid plans to rescind a rule curbing AI chip exports. Trump said China talks would be “substantive” and could result in progress. Arm shares fell on a weak revenue forecast and Krispy Kreme slumped 23% after withdrawing its full-year outlook. Meanwhile, the EU proposed tariffs on €95 billion of US goods if talks fail. (Bloomberg)(Reuters)

7.

Warner split: Shares in Warner Bros Discovery, the parent of HBO and CNN, surged after CNBC reported the media giant is moving towards a potential breakup. The gains came even as its financial results missed expectations. The company reported under the new structure for the first time on Thursday, and sources told CNBC an announcement could come in the near future. In other corporate news, Toyota Motor said it expects its operating profit to decline by about one-fifth in the fiscal year ending March 2026, projecting income of ¥3.8 trillion ($40 billion), down from ¥4.8 trillion last year. The company cited headwinds from a stronger yen and said it would take a ¥180 billion ($1.9 billion) hit from US auto tariffs in April and May alone. Chief executive Koji Sato said the impact beyond that is “very difficult to forecast” and described the trade environment as being in “extreme flux.” (Quartz)(NYT)(Reuters)(Toyota)

8.

BoE cut: The Bank of England cut interest rates by 0.25 points to 4.25% on Thursday, with an unexpected three-way split among policymakers. Two voted for a larger cut, and two to keep rates on hold. The Bank kept its “gradual and careful” guidance and said “interest rates are not on autopilot.” It lowered inflation forecasts, expecting a 3.5% peak in Q3, from 2.6% in March, and a return to 2% in Q1 2027. Governor Andrew Bailey said the rate path is “gradually and carefully downwards” as the bank projected 1% economic growth this year. Bailey welcomed the new US-UK trade deal for reducing uncertainty but added, “we need many trade deals.” (FT)(Bloomberg)(Reuters)