Israel blasts Yemen in three-front Iran proxy war

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

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1.

Three fronts: Israel targeted Yemen's Houthis on Sunday, as Hezbollah confirmed the recent killing of senior official Nabil Kaouk, days after airstrikes in Beirut killed its leader Hassan Nasrallah. Israel is now engaged in combat with all three Iran-backed militias: Hezbollah, the Houthis and Hamas. Israeli forces continued pounding Hezbollah targets in Lebanon, while the air force struck Yemen's port of Hodeidah, according to Axios citing Israeli officials. The IDF said dozens of aircraft targeted Houthi military sites, including power plants and an oil-import seaport, in retaliation for recent Houthi missile attacks on Israel. In the Beirut strikes on Friday, a senior officer in Iran’s Revolutionary Guard, Abbas Nilforushan, was also confirmed killed, prompting Iranian threats of retaliation. The attacks in Lebanon have killed over 1,000 people, including 87 children and 14 paramedics. The escalation follows nearly a year of conflict since Hamas' 7 October attack, intensifying fears of a broader regional war. Iran's Supreme Leader Ayatollah Ali Khamenei mourned Nasrallah, calling on all Muslims to rise against Israel. (Capital Brief)

2.

Helene havoc: Hurricane Helene has killed at least 64 people across five US states including Florida, Georgia, North Carolina South Carolina and Virginia, with the death toll expected to rise. The storm, a Category 4 hurricane, was the strongest ever to hit Florida's Big Bend region and caused catastrophic destruction through wind, flooding and landslides. South Carolina recorded the highest fatalities (24), including two volunteer firefighters. Western North Carolina faced catastrophic flooding and landslides, resulting in 10 deaths in Buncombe County, where officials described the devastation as “biblical”. Over 73 people were unaccounted for in Tennessee’s Unicoi County. Thousands remain without power, and major rescue efforts are ongoing, with over 200 water rescues performed in North Carolina. “We will make certain that no resource is spared to ensure that families, businesses, schools, hospitals, and entire communities can quickly begin their road to rebuilding," US President Joe Biden said.(NYT)(ABC News)

3.

Chinese stimulus: China took steps to cut home borrowing costs on as much as USD5.3 trillion ($7.52 trillion) in mortgages for millions of families, Bloomberg reported citing a statement from the People’s Bank of China announcing it would reduce interest rates on existing home loans, effective 1 November. The PBOC said commercial banks would lower mortgage rates by no less than 30 basis points below the Loan Prime Rate, the central bank's benchmark rate for mortgages. Meanwhile, major cities like Shanghai, Shenzhen and Guangzhou lifted restrictions on home purchases to stimulate demand. The measures are part of Beijing's determination to revive the housing market, which has seen new home prices drop and property sales decline 18% year-on-year. (Reuters) (Bloomberg)

4.

Fiscal feat: The Albanese government will today confirm a second consecutive budget surplus of $15.8 billion for the 2023-24 financial year, $6 billion more than forecast in May. That follows a $22.1 billion surplus in 2022-23, making it the first back-to-back surplus since the 2006-07 and 2007-08 budgets. The 2023-24 final budget outcome will be detailed by Chalmers and the finance minister, Katy Gallagher. Australia is, however, expected to record a deficit of $28.3 billion in 2024-25, partly due to a drop in key commodity prices like iron ore and LNG. The surplus was achieved entirely through lower government spending, helping to pay down debt and reduce inflation pressures, Treasurer Jim Chalmers said in a statement before the update. Meanwhile, Australia lowered its forecasts for resource and energy exports to $372 billion in the year ending June 2025, down from a previous forecast of $380 billion, Reuters reported. (Capital Brief)

5.

Syrian strikes: The US military said it killed 37 militants in two separate airstrikes in Syria this month including one last Tuesday, targeting ISIS and the al-Qaeda-affiliated Hurras al-Din group. A strike on 16 September hit a “remote ISIS training camp” in central Syria, killing 28 militants, including four senior leaders, and a second attack on 24 September in north-western Syria killed nine militants, including Marwan Bassam ‘Abd-al-Ra’uf, a senior Hurras al-Din leader overseeing military operations. “The airstrike will disrupt ISIS' capability to conduct operations against US interests, as well as our allies and partners,” the US Central Command (CENTCOM) said in a statement on Sunday. It was the second US strike against the senior leadership of Hurras al-Din, which emerged in Syria in 2018, in recent months. (Capital Brief)

6.

Right turn: Austria's far-right Freedom Party (FPÖ) is projected to win the parliamentary election for the first time, outpacing Chancellor Karl Nehammer's conservative ÖVP. Deutsche Welle reported early projections from the Institut Foresight show FPÖ at over 29%, with ÖVP at 26.2% and the centre-left Social Democrats at 20.4%. FPÖ leader Herbert Kickl, who has vowed to deport asylum seekers, to end support to Ukraine and to end sanctions on Russia, declared his readiness to lead a government. Nehammer ruled out cooperation with Kickl, while hinting at a possible partnership with the FPÖ to stop Kickl from becoming chancellor. Analysts suggest a three-way coalition between conservatives, Social Democrats, and NEOS could still form. The FPÖ has previously been in government but has never topped the national vote before. Over 6.3 million people were eligible to vote, and the final results are still pending. (Deutsche Welle)

7.

Apple dropout: Apple has withdrawn from discussions to join OpenAI's funding round, the Wall Street Journal reported citing unnamed sources with knowledge of the raising, which is expected to raise up to a mammoth USD6.5 billion ($9.41 billion). Microsoft and Nvidia remain in talks, with Microsoft expected to invest around USD1 billion on top of its existing USD13 billion commitment to OpenAI. Thrive Capital is leading the round, contributing approximately USD1 billion with the option to invest an extra USD1 billion next year, Reuters reported. Tiger Global Management and UAE's MGX are also in discussions to participate. The funding round comes as OpenAI's shifts from a nonprofit to a for-profit structure, a process that must be completed within two years or investors could reclaim their money, the paper said. Neither OpenAI nor Apple commented on Apple's withdrawal from the funding talks. (WSJ)

8.

iPhone ashes: Indian authorities will conduct a forensic investigation into a fire at Tata Electronics' plant in Hosur, Tamil Nadu, which produces components for Apple iPhones. The fire began in a chemical storage area on Saturday and was completely extinguished. It is unlikely the state will grant permission for the factory to resume production by Monday, Reuters reported citing sources familiar with the situation. Two workers were hospitalised but are expected to be discharged soon. A forensic team from Chennai is on-site for further investigation. Neither Tata Electronics nor Apple responded to Reuters’ requests for comment. The incident follows Apple's recent supply chain diversification efforts in India, where the US company aims to reduce dependence on China. (Reuters)