Chalmers flags Trump means higher prices, lower growth

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

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1.

Trump fallout: Treasurer Jim Chalmers is warning of potential economic fallout for Australia from US president-elect Donald Trump’s trade policies, with forecasts pointing to slower growth and rising prices. In prepared remarks for the Australian Institute for International Affairs gala dinner on Monday, Chalmers said Treasury modelling anticipates a “small reduction in our output and additional price pressures, particularly in the short term.” Chalmers' comments come as Labor readies for its re-election bid next year, with cost-of-living concerns expected to be a major issue, just like in the US election. Chalmers also cautioned that if Trump’s tariffs were to trigger a global trade war, Australia “wouldn’t be immune.” The remarks come amid concerns the imminent Trump administration could also disrupt the AKUS defence partnership. (Capital Brief)(The Washington Post)

2.

RBA’s view: Reserve Bank of Australia deputy governor Andrew Hauser, in an interview with Capital Brief, said a broad range of outcomes were possible under a second Trump administration. “I don’t think we’re going into a Great Depression and I don’t think we’re going into a new dawn," he said. Trump’s decisive victory in the US election would create “opportunities as well as threats” for Australia, he said, but the ultimate impact on the economy would hinge on how countries respond to his policies. Hauser conceded Trump 2.0 poses substantial risks to the local economy, saying an “Armageddon-ish story” is possible, but noted there are also more nuanced scenarios. He added that although Australia has historically adapted to economic shifts and has significant resource strengths, a collapse in global trade would be challenging for the country. (Capital Brief)

3.

Bitcoin sweep: Bitcoin reached a new record high of USD80,000 ($121,580) following Donald Trump’s decisive election victory amid surging optimism about a potential pro-crypto administration. The milestone came as Trump secured wins in Nevada and Arizona during the weekend to complete a clean sweep of all seven swing states and setting the stage for a more crypto-friendly administration. The Republican party is also set to take control of the Senate, while the final results for the House of Representatives are still pending. Bitcoin rose over 4% to as high as USD80,095.17, before paring back some gains to be at USD79,799.16 early Monday morning AEDT, according to Coindesk. Cryptocurrencies like Ethereum and Solana also rose 8.9% and 4.5%, respectively. XRP surged 11%, Cardano’s DeFi token soared 40% and memecoins Dogecoin and Shiba Inu jumped 17% and 31% respectively. Analysts anticipate policy changes and a softer regulatory stance from the SEC. (Capital Brief)

4.

Chip freeze: Taiwan Semiconductor Manufacturing Company (TSMC) will halt production and shipments of advanced AI chips (7 nanometres and smaller) to Chinese clients starting Monday, according to media reports. The move follows a US directive and scrutiny after a TSMC-made chip was found in a Huawei AI processor, which violated export controls. TSMC informed Chinese customers of the suspension, The Financial Times and Reuters reported citing sources. Future supplies of such semiconductors will likely require US approval, the FT sources said. TSMC said it is committed to complying with export controls. Chinese companies such as Alibaba, Baidu and AI chip start-ups relying on TSMC’s manufacturing may be impacted. TSMC’s revenue from China fell from 20% in 2019 to 12% by last year due to the US crackdown. (FT)(Reuters)

5.

Eye-to-eye: Israeli Prime Minister Benjamin Netanyahu said has spoken with US President-elect Donald Trump three times since Tuesday’s election and that they “see eye-to-eye on the Iranian threat in all its components, and the danger posed by it.” In a video statement Netanyahu described the talks as “good and very important” to tighten the alliance between the nations. Meanwhile, Reuters reported Israeli strikes killed dozens, including children, in Lebanon and Gaza, while ousted defence minister Yoav Gallat reportedly told hostage families that “there’s nothing left in Gaza to do. The major achievements have been achieved”, Channel 12 news quoted him as saying. “I fear we are staying there just because there is a desire to be there.”(Sky News)(The Guardian)(The Times of Israel)

6.

Qatar talks: Qatar paused its mediation between Israel and Hamas, saying it will only resume when both sides show "willingness and seriousness" for a ceasefire and hostage release deal. The decision follows a warning Qatar issued 10 days ago, during the latest attempts to broker an agreement, to halt efforts if progress wasn't made, Reuters reported, citing Qatar’s foreign ministry. Israeli Prime Minister Benjamin Netanyahu has accused Qatar of not pressuring Hamas enough to reach a deal, angering Qatar, which accused Netanyahu's far-right government of undermining peace efforts. Qatar informed both parties it could no longer mediate “as long as there is a refusal to negotiate in good faith” saying “the Hamas political office no longer serves its purpose” in Qatar, The Associated Press reported, citing a diplomatic source. That followed reports last week that Washington urged Qatar to expel Hamas, though Qatar has not set a deadline for closing the office. (Capital Brief)

7.

Drone strike: Ukraine launched its largest drone attack on Moscow and surrounding regions since the war began, according to media reports, with Russian Defense Ministry saying air defences shut down a total of 84 Ukranian drones over multiple regions, including all 34 drones aimed at the capital. The strikes temporarily halted flights at Moscow’s major airports, diverting 36 flights. At least one person in the Moscow region was injured, a 52-year-old woman who was hospitalized with shrapnel injuries. Concurrently, Russia launched a record 145 drones at Ukraine, with Ukraine's air force downing 62. Ukranian officials said drones targeted an arms depot in Bryansk. (AP)(Reuters)(The Washington Post)(CNN)

8.

Golden grip: Terry Holohan, CEO of Australian miner Resolute Mining, and other executives have been detained by Mali’s ruling military junta. Media reports indicate they were arrested on Friday in Bamako and are being questioned by an anti-corruption unit over allegations of providing false evidence and misappropriating public goods, according to a judiciary source and an anonymous Resolute executive cited by AFP. Resolute, listed on the ASX and LSE and valued at under $1.5 billion, holds an 80% stake in the Syama gold mine, with the Malian government owning 20%. It is the second detention of international mining company employees in Mali in just over a month, as the military-led government tightens control over the mining sector. Barrick Gold staff were detained for days in September. Mali, Africa’s third-largest gold producer, introduced a new mining code last year to increase local ownership and revenue. (AFP)