Confidence shaken as Trump sacks stats chief over jobs data

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

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1.

Data dump: Donald Trump’s sudden order to fire the head of the Bureau of Labor Statistics after data showed a slowdown on US hiring, including sharp downward revisions, stoked fears about the integrity of economic data and the Fed’s ability to gauge economic trends. The BLS reported the US added only 73,000 jobs in July, coming below expectations of 100,000 jobs. It also showed nonfarm payroll gains in May and June were 258,000 lower than initially estimated. Trump, without providing evidence, claimed the July jobs numbers were rigged to make him look bad, then ordered that Commissioner Erika McEntarfer be fired immediately. Her firing came on the same day Fed Governor Adriana Kugler announced her early resignation. “She disagreed with ‘Too late’ on the interest rate,” Trump said referring to Fed chair Jerome Powell. “We just found out that we have one open spot on the Federal Reserve Board, I’m very happy about that.” The developments deepened concerns about leadership changes at key economic institutions. Investors reacted by sharply raising bets on a September interest rate cut, following the release of weaker-than-expected jobs data. BofA CEO Brian Moynihan, however, said his economists still believe there will be no rate hikes this year. (BLS)(Reuters)(WSJ)(Bloomberg)

2.

Supply surge: Opec+ will raise oil production by 547,000 barrels a day in September, fully reversing the 2.2 million bpd cut made by eight members in January 2024, the group said in a statement on Sunday. The cut, prompted by weak Chinese demand and the rise of electric vehicles, failed to stop falling prices and cost Opec+ market share to the US, Brazil and Canada. Though the group initially planned a gradual unwind, it moved faster than expected in order to recover market share, and is now a year ahead of schedule. The latest decision, made in a 16-minute virtual meeting according to a senior Opec delegate, also grants the UAE an extra 300,000 bpd. It comes amid US pressure on India to reduce Russian oil imports and warnings of a looming surplus. The IEA forecasts a 2 million bpd glut by year-end as supply rises. (Capital Brief)(OPEC)(Bloomberg)(FT)

3.

Last (resort) offer: Steelmaker BlueScope formed a consortium with South Korea’s POSCO, Japan’s Nippon Steel and India’s JSW Steel to bid for the Whyalla steelworks, which was forced into administration in February after months of unpaid bills under former owner Sanjeev Gupta. According to The Australian Financial Review, which cited unnamed sources, the consortium lodged an indicative expression of interest in the first stage of the sale process, which closed last Friday and is being handled by administrator KordaMentha. It comes after the federal and South Australian governments announced a $2.4 billion bailout of the plant in February, including a $500 million investment in upgrading the mill if a new buyer is found. POSCO flagged its interest again last week, citing mining opportunities and renewable energy possibilities. According to reports, other potential bidders include the Kerry Stokes-controlled SGH. (AFR)

4.

Lobby lines: Palantir appointed CMAX Advisory for lobbying duties in Australia, a month after the Greens called for an immediate freeze on the defence tech company’s government contracts. Founded by Peter Thiel and Alex Karp in 2003 to service the US defence establishment, Palantir was listed as a client on the Attorney-General’s lobbyist register on 28 July. CMAX, started by former Labor staffer Christian Taubenschlag, confirmed Palantir is a customer. Greens defence and digital rights spokesman David Shoebridge in July accused the company of facilitating mass surveillance, deporting migrants and being directly involved in the genocide in Gaza. Palantir last December won a $4.2 million six-month Defence tender and holds ongoing contracts including $7.15 million in data services through 2027 and $8.1 million of works for AUSTRAC. (Capital Brief)

5.

Tariff hit: Berkshire Hathaway said it took a USD3.76 billion ($5.8 billion) write-down on its Kraft Heinz stake, as tariffs, weak consumer demand and uncertainty around trade policy weighed on retail-facing businesses. The conglomerate’s consumer products revenue fell 5.1% and Jazwares, maker of Squishmallows, saw sales drop 38.5%. The write-down followed Kraft Heinz’s announcement it would consider strategic alternatives, which could include a breakup. Analysts viewed the overall results as lacklustre ahead of a busy week for retail and consumer earnings from McDonald’s, Disney, Airbnb, Uber and others. Meanwhile, Swiss companies including Roche, Novartis, Nestlé, Richemont and Swatch are bracing for a hit after the US blindsided the country with a 39% tariff rate, one of the world’s highest. The move, announced on Switzerland’s national day, followed a failed phone call between President Karin Keller-Sutter and Donald Trump and has prompted emergency talks amid warnings of a recession and political fallout in Bern. (FT)(Bloomberg)(Reuters)(WSJ)

6.

Power reset: The Productivity Commission is recommending a suite of changes to environmental laws and emissions reduction incentives to help ensure Australia reaches its clean energy targets. In its second interim report ahead of the government's Economic Reform Roundtable, the Commission calls for a shift to market-based incentives in the electricity sector, replacing the Renewable Energy Target and the Capacity Investment Scheme. It also proposes lowering the Safeguard Mechanism threshold, introducing an emissions-reduction incentive for heavy vehicles, and reforming national environment laws to speed up approvals. Submissions are open ahead of a final report. (Capital Brief)

7.

Gaza grind: At least 90,000 pro-Palestine protesters marched across the Sydney Harbour Bridge on Sunday in heavy rain, bringing the city to a standstill and forcing police to redirect the crowd amid fears of a crowd crush. The protest, which organisers say drew between 200,000 and 300,000 people, followed the release of a Hamas propaganda video showing Israeli hostage Evyatar David visibly starved in a tunnel, intercut with images of starving Palestinian children and a message stating “They Eat What We Eat”. The footage was released soon after US envoy Steve Witkoff and ambassador Mike Huckabee visited a food site in Gaza backed by Israel and the US, which international aid groups have criticised for inadequate relief and forcing displacement. Witkoff reportedly told hostage families negotiations should now shift to an 'all or nothing' approach, with all living hostages released at once. On the same day, Israeli minister Itamar Ben-Gvir prayed at the Al-Aqsa mosque compound, in breach of decades-long status-quo arrangement that bars non-Muslim prayer at the site, prompting condemnation from Palestinian officials who said the visit "crossed all red lines"(FT)(SMH)(Reuters)

8.

Prosecutor probed: The US Office of Special Counsel is investigating Jack Smith, the former Justice Department special counsel who brought two criminal cases against Donald Trump, for a possible violation of the Hatch Act. The inquiry follows a request from Republican Senator Tom Cotton, who alleged Smith unlawfully took political actions to influence the 2024 election. Smith led prosecutions accusing Trump of conspiring to overturn the 2020 election and hoarding classified documents, but both cases were later abandoned. One indictment was delayed after a Supreme Court ruling expanded presidential immunity, the other was dismissed by a federal judge who ruled Smith had been unlawfully appointed. Smith resigned from the Justice Department in the days before Trump’s inauguration. The OSC has no criminal enforcement power but can impose sanctions ranging from a reprimand to removal from federal service. (WaPo)(NYT)