Israel opens Lebanon talks as Iran’s Khamenei declares victory

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

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1.

Iran war: Benjamin Netanyahu agreed to open direct peace talks with Lebanon even as Israeli bombs were still falling there, ahead of a first face-to-face meeting between US and Iranian officials scheduled for Saturday in Islamabad with the fate of the fragile ceasefire hanging on the outcome. The Israeli prime minister said he had instructed his cabinet to open direct talks “as soon as possible”, focused on disarming Hezbollah and establishing peaceful relations, just hours after Israeli officials said there was no ceasefire in Lebanon and vowed to keep striking “with full force.” Meanwhile, Iran’s foreign ministry spokesman Esmaeil Baghaei said Tehran would not attend the Islamabad talks if Lebanon was not brought under the ceasefire umbrella, describing it as an “inseparable” part of Pakistan’s ceasefire proposal. In his first statement since the truce, supreme leader Mojtaba Khamenei declared Iran had won “the third imposed war”, vowed to seek compensation for every damage inflicted and said the Strait of Hormuz would move to a “new phase” of management. Traffic at the strait remained well below 10% of normal, according to Reuters. Iran is reportedly already charging some vessels USD2 million to cross, the WSJ reported citing an unnamed Iranian lawmaker. Trump, meanwhile, told NBC he was “very optimistic” about a peace deal, but warned that if Iran didn’t come to terms, “it’s going to be very painful.” He said Netanyahu had agreed to “low-key it” in Lebanon. And Saudi Arabia said the Iranian attacks had cut its oil production capacity by 600,000 barrels per day and reduced East-West pipeline throughput by 700,000 barrels per day. Markets tracked the uncertainty closely in a volatile day. The S&P 500 edged up 0.62% on ceasefire hopes while oil rebounded, with WTI hovering near USD98 a barrel. (Capital Brief)(Bloomberg)(WSJ)(FT)(NYT)

2.

NATO talks: Trump is considering pulling US troops from Europe after NATO allies failed to support the Iran war effort, Reuters reported. No decision has been made and the Pentagon has not been directed to draw up plans, but the discussions alone signal the depth of the rift. The US currently has more than 80,000 troops in Europe, with more than 30,000 in Germany alone, according to the report. The report came as Trump posted that NATO allies didn’t understand “anything unless they have pressure placed upon them.” NATO Secretary-General Mark Rutte, speaking in Washington after meeting Trump a day earlier, acknowledged some allies had been “a bit slow”, noting Trump had not informed them before launching the war, but said they were now “doing everything the United States is asking.” Earlier, Bloomberg reported that at the meeting, Trump demanded NATO allies provide concrete plans to secure the Strait of Hormuz after the conflict ends. Germany’s Chancellor Friedrich Merz said Berlin was prepared to help but would need a UN Security Council mandate first, and planned to resume direct talks with Tehran. (Reuters)(Bloomberg)(WSJ)(FT)(NYT)

3.

Melania’s story: In an unexpected move that threatens to thrust the Epstein story back into the political spotlight in the US, Melania Trump made a rare public statement at the White House to deny she ever had a relationship with Jeffrey Epstein. Calling years of accusations “completely false” smears designed to defame her, the first lady said she was not friends with Epstein or his associate Ghislaine Maxwell, but acknowledged moving in overlapping social circles in New York and Florida. She said she had sent Maxwell a reply email, which she described as “casual correspondence.” “My polite reply to her email doesn’t amount to anything more than a trifle,” she said. She added she was not Epstein’s victim and had fought “unfounded and baseless lies with success” through her attorneys. Melania also called on Congress to hold a public hearing for survivors of Epstein’s crimes, saying “each and every woman should have her day to tell her story in public if she wishes.” Her statement, which a spokesperson said the president knew about in advance, came just as the Epstein controversy had begun to fade, overshadowed by the Iran war. (White House)(AP)(NYT)(Reuters)

4.

Core compute: Meta committed USD21 billion ($29.7 billion) to AI cloud provider CoreWeave in a single deal, its biggest yet as the social media giant rushes to catch up with rivals in the race to build more powerful AI models. The agreement, which runs through December 2032, brings Meta’s total contracts with CoreWeave to USD35 billion, following a USD14.2 billion deal signed last September the company said. The expanded partnership gives Meta access to initial deployments of Nvidia’s next-generation Vera Rubin chips, which are twice as fast as the current Blackwell platform. “The (deal) is a clear signal of the industry’s accelerating demand for high-performance infrastructure capable of supporting increasingly complex, large-scale AI workloads,” the company said in a statement. According to Reuters, Meta is planning to spend up to USD135 billion on its AI buildout this year. It comes a day after Meta unveiled Muse Spark, the first model from Meta Superintelligence Labs. Separately, CoreWeave said it plans to raise USD4.25 billion through two bond offerings. Shares in both companies were higher. (Capital Brief)(CoreWeave)

5.

Exposed cables: The UK caught Russia running a secret submarine operation over its critical undersea cables and pipelines. Revealing the covert operation publicly at a Downing Street press conference, Defence Secretary John Healey said Britain wanted Vladimir Putin to know the activity had been detected. “We see you, we see your activity over our cables and our pipelines, and you should know that any attempt to damage them will not be tolerated and will have serious consequences,” he said addressing the Russian president. The operation lasted over a month and involved a Russian Akula-class attack submarine, probably used as a decoy, Healey said. Two specialist submarines from Russia’s Main Directorate for Deep Sea Research, known as GUGI, “designed to survey underwater infrastructure during peacetime and sabotage it in conflict,” were the main threat, discovered lurking over critical undersea infrastructure. Britain deployed a frigate, support tanker and patrol aircraft alongside Norwegian forces, and the submarines have since left the area. There was no evidence of damage to any cables or pipelines, Healey said. He accused Russia of deliberately timing the operation to exploit the world’s distraction with the Middle East conflict, saying “Putin would have wanted us to be distracted.” While many eyes were on the Middle East, he said, Britain was “tackling increasing threats to NATO in the High North, maintaining strong support for Ukraine and protecting our UK homeland.” Separately, Putin’s special envoy Kirill Dmitriev is in the US meeting Trump administration officials on Ukraine and economic cooperation, ahead of an 11 April oil sanctions deadline, Reuters reported. (John Healey)(UK Government)(Capital Brief)(AP)(Reuters)

6.

More to do: Anthony Albanese’s response to a landmark report on gambling harm ignored a plea by Indigenous health organisations for more help to limit the damage facing disadvantaged communities. The National Aboriginal Community Controlled Health Organisation (NACCHO) warned in a submission to the government’s You Win Some, You Lose More inquiry that commercial gambling leads to devastating health impacts in Indigenous communities, including substandard housing, homelessness, hunger and high death rates. But the Prime Minister’s response to the inquiry, which he released last Friday at the National Press Club, was silent on gambling harm in Indigenous communities, focusing instead on restricting gambling advertisements during sporting broadcasts. Greens communications spokeswoman Sarah Hanson-Young told Capital Brief the government’s response was weak and ignored “the desperation of one of the most vulnerable groups in the community”, adding that a key missed opportunity was the government’s rejection of the Murphy inquiry’s call for the appointment of a federal gaming regulator. (Capital Brief)

7.

Ready to roll: Sydney-based biotech HaemaLogiX will be ready to hit play on its ASX listing as soon as next week after years of setbacks — but chief executive Chris Baldwin may yet be forced to wait a little longer. “We expect the company will be ready for the market in about a week,” Baldwin told Capital Brief. “The question only becomes — is the market ready for the company, or any company that’s doing anything slightly novel right now?” Immunotherapy developer HaemaLogiX is looking to raise between $20 million and $25 million and has hired Ord Minnett and Canaccord Genuity to lead the initial public offering, which was previously slated for this time last year. Baldwin said his company is ready to kick off an investor roadshow, pending market conditions, with hopes to lock in “two or three” institutional investors. “The only thing standing between us and treating these patients is going to be, I think, what’s happening in the Gulf.” (Capital Brief)

8.

On-premise promise: As Australian governments focus their attention on large-scale data centre projects to capitalise on the AI investment boom, IBM is deepening its commitment to on-premise compute. IBM managing director for Australia and New Zealand Nicholas Flood told Capital Brief it is continuing to service a “remarkably resilient” amount of demand for expanding on-premise mainframes, racks of servers that are installed inside their clients’ offices, and hybrid cloud offerings. Flood said that contrary to expectations, the company’s on-premise infrastructure revenue has grown over the last five years, including through the deployment of Nvidia GPUs directly into servers installed in offices. While Flood said IBM is continuing “to overachieve expectations that are provided to us as part of our annual planning cycles”, the company declined to provide concrete figures as it is in a blackout period ahead of its Q1 earnings result later this month. (Capital Brief)