Rate cut fires up election race

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

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1.

Election timing: Tuesday’s rate cut, the first after 13 rises, may now shape the rapidly narrowing window in which the government can call an election, which must be held by 17 May. Capital Brief reports three potential dates are being widely discussed in parliament; 12 April has been touted for weeks as the last possible date before Labor would be forced to deliver a budget. But 5 April and 29 March are also viewed as strong possibilities. Labor could see the 29 March as the safest bet, wielding the first rate cut since 2020 as ammunition for the polling booth. While a rate hold could pose risks for Labor if the election is just days later on 5 April, giving voters the impression that further relief isn’t coming. Falling nearly a fortnight after the second rate decision, a 12 April election allows time for the benefits of Tuesday’s cut to flow through to voters’ mortgage repayments. (Capital Brief)

2.

US-Russia talks: US and Russian officials met for over 4.5 hours of talks in Saudi Arabia, agreeing to further negotiations on ending the Ukraine war, restoring diplomatic missions and exploring economic cooperation. Ukraine and European leaders were not present. Russia insisted NATO rescind its 2008 pledge to admit Ukraine and said the stationing of NATO-member troops in Ukraine, under any flag, was unacceptable. It also signalled “high interest” in lifting economic restrictions. The meeting followed a Trump-Putin phone call days earlier that raised concerns in Kyiv and European capitals about the US already making large concessions to Russia. US Secretary of State Marco Rubio said no one was being sidelined and that any solution must work for Ukraine and Europe. Ukrainian President Volodymyr Zelenskiy postponed a planned visit to Saudi Arabia, saying no decisions should be made “behind the backs” of Ukraine. Meanwhile, Ukraine’s dollar bonds saw their biggest daily loss in months. (US Department of State)(Bloomberg)(Reuters)

3.

Levy pledge: The Digital Publishers Alliance has received assurances from the Albanese government that it will advance work on its news bargaining incentive despite mounting concern that Labor has paused its plans over fears of trade retaliation from US President Donald Trump. The lobby group told Capital Brief it is operating on the basis the government will continue work on the policy, which aims to force tech giants to pay news publishers for their content, even as Labor falls behind schedule in the face of a looming federal election. Chair of the Digital Publishers Alliance, Tim Duggan, said “We’ve had discussions with multiple government departments this week to confirm that they are continuing to advance the policy they announced recently,” Duggan said. Several other senior media industry executives confirmed to Capital Brief that they had also received assurances from Communications Minister Michelle Rowland that the policy remained a government priority. (Capital Brief)

4.

DEI block: At least four key business groups will vote against the ASX Corporate Governance Council’s proposed diversity reporting rules, effectively killing any chance of consensus, according to media reports. The Business Council of Australia, the Australian Institute of Company Directors, the Governance Institute of Australia and the Australasian Investor Relations Association confirmed their opposition to the AFR. An unnamed source told the publication at least one other key group also planned to vote no. The reforms, backed by investor and superannuation groups, would require boards to report diversity characteristics beyond gender, including sexuality, age, Indigenous heritage and disabilities. Investor John Wylie, called them an overreach and invasion of privacy. With no broad agreement, the council is expected to pause the process. Meanwhile, the Wall Street Journal reports the Trump administration has scrapped a Biden-era policy that factored diversity, equity and inclusion into federal contracting, shifting procurement rules to focus solely on price and performance. (AFR)(The Australian)(Capital Brief)

5.

Grok rival: Elon Musk’s artificial intelligence startup xAI debuted Grok-3, the latest version of its chatbot, aiming to challenge OpenAI, Google and DeepSeek. xAI claims Grok-3 outperforms OpenAI’s GPT-4o, Google’s Gemini, DeepSeek’s V3 and Anthropic’s Claude across math, science and coding benchmarks. Musk said the model has “more than 10 times” the compute power of its predecessor and completed pre-training in early January, though the claims have not been independently verified. Grok-3 is rolling out immediately to Premium+ subscribers on X for USD22 ($34.66) a month. xAI also introduced DeepSearch, a reasoning-based chatbot that articulates its thought process and offers research, brainstorming and data analysis functions. Meanwhile, Reuters reports that Food and Drug Administration (FDA) staff reviewing Elon Musk’s Neuralink brain implants were among those abruptly fired in a government purge led by the DOGE office, which Musk heads, sparking fears over the safety of brain implant trials. Elsewhere, former OpenAI CTO Mira Murati launched Thinking Machines Lab, a new AI startup focused on human-AI collaboration, with a team of ex-OpenAI leaders. (Bloomberg)(Reuters)

6.

Babypowder Battle: Johnson & Johnson has entered a crucial stage of its USD10 billion ($15.75 billion) bid to end an immense litigation over claims that its baby powder and other talc products were contaminated with asbestos and caused ovarian cancer. J&J is hoping that US bankruptcy judge Christopher Lopez will sign off on its plan to use a subsidiary’s bankruptcy to resolve lawsuits from over 62,000 plaintiffs. Courts have rejected J&J’s two previous attempts to end the litigation through a subsidiary's Chapter 11, but is optimistic that a new bankruptcy court and broad support for its settlement proposal will get it over the line. Opponents of the settlement argue that by pushing the deal through a subsidiary’s bankruptcy, J&J is trying to force women with ovarian cancer to accept lower settlement payments based on a deeply flawed vote. J&J maintains that its products did not cause cancer. (Reuters)

7.

Share repurchase: Electronics giant Samsung will cancel 3.05 trillion won ($3.32 billion) worth of its own common shares that it had previously acquired, according to LSE regulatory filings. The company will also purchase 2.7 trillion won worth of its own common shares, in addition to 304 billion won worth of other shares. The purchases are scheduled to occur between 19 February and 16 May this year. The decision is in line with the board resolution of November last year to buy back shares worth 10 trillion over the next 12 months, aiming to improve shareholder value and conduct employee stock-based compensation with the moves. The filing says that a portion of the repurchased shares (worth approximately 500 billion won) will be allocated to a stock-based compensation program for executives. Samsung also announced that Jun Young-hyun, the head of its chip business, and chief technology officer Song Jai-hyuk have been appointed as board members. (Samsung share cancellation filing)(Samsung share repurchase filing)(Capital Brief)

8.

Money pit: Mineral Resources (MinRes) axed its interim dividend after reporting sharp losses as results from the six-month period ending December 2024 revealed a 9% drop in revenue on the prior corresponding period. The company posted a net loss after tax of $807 million, down $1.34 billion year-on-year. The result included $352 million of post-tax impairment charges, largely tied to MinRes’ Bald Hill lithium project. The company generated underlying EBITDA of $302 million for 1H25, down 55% for the previous comparable period. MinRes said that second-quarter production benefited from the ramp up of Onslow Iron, but was offset by lower volumes at Yilgarn Hub and Bald Hill. Severe weather events also impacted the miner’s Onslow Iron operations. Managing director Chris Ellison, who is facing a probe over alleged tax evasion, said "It has been a challenging six-month period for MinRes, but our Company has a history of weathering storms and coming out stronger."(MinRes HY25 results)(MinRes results announcement)(Capital Brief)