Trump gives Iran 10-day nuclear ultimatum, assembles biggest force since 2003

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

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1.

Hot spot: The US assembled a vast array of military forces in the Middle East, the largest such deployment since the 2003 invasion of Iraq, as President Trump pressed Iran to strike a nuclear deal, appearing to set a 10-day deadline before Washington might take action. During the first meeting of his Board of Peace, Trump told dignitaries that “bad things” would happen without an agreement. He warned Iran was a “hot spot” even as both sides had held what he described as “good talks”. “We may have to take it a step further or we may not. You’ll be finding out over the next probably 10 days,” he said. Trump has not yet decided to order strikes, but options under consideration range from a targeted attack on nuclear and missile facilities to a sustained, weekslong campaign aimed at toppling the regime, The Wall Street Journal reported citing unnamed US officials. The heightened geopolitical tensions sent oil prices surging, with Brent crude rising above USD71 a barrel. (WSJ)(Bloomberg)(Reuters)

2.

Royal disgrace: Andrew Mountbatten-Windsor, King Charles’s younger brother, was arrested on suspicion of misconduct in public office, the first arrest of a British royal since King Charles I in the 17th century. British police arrested him at the Sandringham estate in Norfolk on his 66th birthday, and searched addresses in Berkshire, including his former home, Royal Lodge. He has not been charged. The arrest comes after the US DOJ released millions of Epstein files. Some of those suggest Mountbatten-Windsor shared confidential government information with convicted sex offender Jeffrey Epstein during his time as UK trade envoy (2001–2011), advocated for Epstein during a 2010 state visit to the UAE with the late Queen Elizabeth, and sought to broker a USD8 billion ($11.3 billion) loan between China and the UAE. Police are also assessing a separate allegation that a woman was taken to a Windsor address in 2010 for sexual purposes. King Charles said in a statement he had learned of the arrest with “deepest concern,” pledging full cooperation. “The law must take its course,” he said. Mountbatten-Windsor, stripped of his titles including “prince” by King Charles last year, remains eighth in line to the throne and has consistently denied wrongdoing. The royal family is far from alone in facing fallout from the Epstein files. Kathryn Ruemmler, who resigned last week as chief legal officer of Goldman Sachs, corresponded with Epstein about a prostitution scandal that engulfed the US Secret Service during her tenure as White House counsel under Barack Obama, Bloomberg reported. Released emails showed she forwarded Epstein a draft email containing nonpublic information about the White House’s role in investigating the 2012 incident, and accepted his input on how to handle media coverage. Her spokeswoman said she “has done nothing wrong and has nothing to hide.” (Thames Valley Police)(Capital Brief)(BBC)(FT)(Bloomberg)

3.

Big shots: NYSE-listed telehealth giant Hims & Hers is acquiring heavily hyped Australian weight loss startup, Eucalyptus, in a USD1.15 billion ($1.63 billion) deal. A statement on the acquisition said approximately USD240 million is payable in cash upon closing with the remaining consideration consisting of deferred payments over the 18 months post-closing and additional payments tied to achieving financial milestones through early 2029. Tim Doyle, current CEO of Eucalyptus, will become the SVP of International at Hims & Hers once the deal closes in mid-2026 and will oversee the company’s international business. Doyle’s 10% stake will see him rake in $163 million from the sale, the AFR reported. In November, the paper reported that Eucalyptus was close to completing a funding round that would have valued the company at $1.35 billion. The round was suspended after Hims & Hers approached Eucalyptus with the buyout offer. The deal will also spell a payday for Eucalyptus backers including Blackbird Ventures, Woolworths’ W23 Ventures, Airtree Ventures and OneVentures. (Capital Brief)(Hims & Hers)(AFR)

4.

Canary sings: Shares in the biggest private investment managers on Wall Street tumbled after Blue Owl Capital permanently restricted investors from exiting a retail debt fund, an about-face that came just as investors expected redemptions to resume, sending shivers through the fast-growing private credit industry. Blue Owl said it had sold USD1.4 billion in assets across three credit funds at 99.7% of par value to buyers the company described as leading North American pension and insurance investors. Blue Owl shares fell as much as 10.3% in intraday trading. Ares, Blackstone, Apollo, Carlyle and KKR all fell sharply. “Is this a ‘canary-in-the-coalmine’ moment, similar to August 2007?” economist Mohamed El-Erian wrote on X. “The question will be on the minds of some investors and policymakers this morning.” During an analyst call, Blue Owl co-president Craig Packer said “We’re not halting redemptions, we are simply changing the method by which we’re providing redemptions.” Meanwhile, Klarna shares plunged by as much as 27% to a record low after the Swedish buy now, pay later group reported a USD26 million ($36 million) net quarterly loss and set aside USD250 million for credit losses in the fourth quarter last year. That was up nearly 60% on the same period a year earlier. Quarterly revenue rose 38% year-on-year to USD1.08 billion. And Bloomberg noted how Mike Cannon-Brookes and Scott Farquhar have lost about a third of their combined wealth as Atlassian shares slump 48% so far this year to lead the Nasdaq 100’s losses. (FT)(Reuters)(Bloomberg)

5.

Super funder: The $4.5 trillion superannuation sector is now a bigger source of funding for corporate Australia than the banking system, according to new research from the industry’s peak body. The Association of Superannuation Funds of Australia (ASFA), which represents retail and not-for-profit ‘industry’ super, says APRA-regulated funds and self-managed super funds (SMSFs) now provide 44 cents out of every dollar of funding for Australian companies, versus 36 cents from the banks. The data underscores the rapid growth of super, which across the whole business sector (including small businesses) now represents 39% of accumulated domestic funding, almost double its level of 23% two decades ago. On that broader measure, banks still represent the biggest line of funding at 44%. The research may raise questions about ongoing consolidation within the sector as the number of APRA-regulated funds dropped to 56 last year, with Mercer estimating on the current trajectory just 30 will remain by 2034. (Capital Brief)

6.

Crude awakening: Heightened US-Iran tensions sent stocks lower and oil surging overnight. The S&P 500 was trading 0.41% lower in the afternoon in New York, the Dow down 0.63% and the Nasdaq 0.45% lower. West Texas Intermediate rose 1.7% to USD66.31 a barrel and Brent futures advanced as much as 2% toward USD72. Sentiment was further dented when Blue Owl Capital moved to restrict withdrawals from one of its private credit funds, selling USD1.4 billion in assets to manage debt and return capital. On the economic front, official data showed the US trade deficit widened 32.6% to a five-month high of USD70.3 billion in December, well above forecasts of about USD55.5 billion. The annual goods trade gap also widened to a record high of USD1.24 trillion in 2025. In corporate news, farm-machinery maker Deere jumped after it raised its annual profit forecast, anticipating a long-awaited upturn in the agriculture economy. Amazon officially dethroned Walmart as the world’s largest company by revenue, as Walmart posted strong quarterly sales but struck a cautious note on its outlook. Airbus cut its 2025 delivery forecast to 870 aircraft, blaming engine shortages from Pratt & Whitney. (Reuters)(WSJ)(Bloomberg)

7.

Economic agenda: Just six months before Labor won 94 seats in the 150-seat House of Representatives in the May federal election last year, polls showed the Coalition and Labor at 50–50 in two-party preferred terms. At that time, the Coalition under Peter Dutton was campaigning hard on the economy — the cost of living, housing affordability and budget management. This is why Angus Taylor reckons his best chance to win the next election, due in 2028, is to likewise focus on economic issues. “For the Coalition parties, it’s always going to be about the economy,” one senior Coalition source told Capital Brief. While Labor insiders told Capital Brief earlier this week the economy was Labor’s strong suit, Taylor hopes the passage of time and a fresh Coalition approach will restore his side’s claim to economic policy primacy. A key part of that strategy is his appointment of Melbourne MP Tim Wilson as shadow treasurer. (Capital Brief)

8.

Hip deal: Johnson & Johnson is preparing to sell DePuy Synthes, the orthopedics unit it has been planning to separate, in a deal that could value the world’s largest orthopedics business at more than USD20 billion, Bloomberg reported citing unnamed sources. J&J is assembling documents and financials before meeting possible buyers in the coming weeks, with several large private equity firms already considering teaming up to acquire the unit, the news agency said. DePuy Synthes, which makes devices used in hip and knee replacements and generated USD9.3 billion in sales last year, could also draw interest from rival medical device players. J&J announced plans in October to separate the slower-growing business within 18 to 24 months, with CFO Joseph Wolk saying the company was “open to ideas that others might have,” including a sale or other transaction if it resulted in greater value. Bloomberg Intelligence analysts estimate the unit could be valued at USD28 billion including debt. Deliberations are at an early stage and there is no guarantee they will result in a sale, Bloomberg said. J&J did not comment.(Bloomberg)