Trump picks Fox host for top defence post

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

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1.

Trump cabinet: President-elect Donald Trump named Fox News host Pete Hegseth as US Secretary of Defense, continuing his practice of appointing loyalists to key positions. Hegseth, an Army National Guard veteran, served in Iraq and Afghanistan, has criticised diversity policies in the military and has no prior senior government experience. Trump has also appointed Elon Musk and biotech entrepreneur Vivek Ramaswamy to lead the newly created “department of government efficiency” (DOGE). The acronym is also linked to the name of a cryptocurrency Musk has promoted. Both Musk and Ramaswamy were vocal Trump supporters during the campaign. John Ratcliffe, a former Director of National Intelligence, has been tapped to lead the CIA. Former White House aide Dan Scavino will return as assistant to the president and deputy chief of staff. James Blair, former Trump campaign and RNC political director, will be deputy chief of staff for legislative affairs, while Taylor Budowich, ex-CEO of MAGA Inc, will serve as deputy chief of staff for communications. (Bloomberg)(FT)(WSJ)(NYT)

2.

Shelter inflation: US consumer prices rose 0.2% in October, according to the Labor Department, in line with forecasts. Core CPI, excluding food and energy, increased by 0.3% for the third consecutive month, driven mainly by higher shelter costs, which drove over half of the monthly CPI increase. Annually, the CPI advanced 2.6%, marking an increase from September's 2.4%, while core CPI rose 3.3% year-on-year. Used car prices surged 2.7%, and airfare increased 3.2%. Energy prices remained steady. The inflation data, combined with robust consumer spending and economic growth, suggests the Fed will likely remain cautious when deciding on the pace of future interest rate cuts. That is especially so, as economists expect higher inflation if President-elect Donald Trump implements his economic agenda of sweeping tariffs on imports and tax cuts. (Capital Brief)

3.

Fear tactics: Human resources software startup Employment Hero is facing an avalanche of criticism from former employees who described a "vile workplace" with a "fear culture" and "shoddy HR practices". Allegations include instructions for staff to post "fake reviews" on platforms like Glassdoor. A former marketing executive’s resignation letter highlighted the cancellation of an International Women’s Day initiative as worsening existing tensions and contributing to feelings of marginalisation among women. The company’s "apolitical" stance was cited in directives to remove an Acknowledgement of Country from a presentation. Concerns were also raised about recent male-dominated leadership hires, with ex-staff speaking of a stressful environment, rapid dismissals, and mental health impacts. Employment Hero’s 'EH Way' culture document, influenced by Tesla, promotes high performance but was described as promoting "conformity" over "unity and progress". A company spokesperson stated Employment Hero values employee safety, investigates complaints seriously and supports its 1300 employees globally. (Capital Brief)

4.

Bitcoin’s bang: Bitcoin’s price topped USD90,000 ($138.75) for the first time ever, driven by enthusiasm following Donald Trump's election victory, which crypto investors believe will benefit digital assets. Since 5 November, Bitcoin has surged 32%, reaching USD93,158. Ether has climbed 37%, and dogecoin, which also associated with Trump’s key ally Elon Musk, surged over 150%. Trump's campaign included plans to make the US the "crypto capital of the planet" and hinted at a national bitcoin reserve, sparking speculative trading in crypto and mining stocks. MicroStrategy disclosed a USD2 billion bitcoin purchase from 31 October to 10 November, pushing its shares to record highs. Funds tracking bitcoin, such as BlackRock's iShares Bitcoin Trust, rose nearly 4%. Meanwhile, Coinbase shares fell 1.3%, and bitcoin miners Riot Platforms and Marathon Digital Holdings declined by over 4%. (Reuters)

5.

Klarna IPO: Klarna, the Swedish buy now, pay later fintech, has confidentially submitted documents for a US initial public offering (IPO), potentially valuing the company between USD15 billion and USD20 billion following years of fluctuating valuations. The FT noted the move follows a significant drop from its peak valuation of USD46 billion in 2021, which later fell to USD6.7 billion during its last official fundraising in 2022. Klarna's expansion in the US has contributed to recent revenue growth, but has also weighed on its profit, prompting job cuts and AI-driven cost measures. Internal tensions emerged as co-founder Victor Jacobsson’s board representative was ousted following disagreements over share acquisitions. Klarna follows other Swedish companies like Spotify in opting for a US listing. (FT)

6.

Trump return: Resident-elect Donald Trump met President Joe Biden at the White House, marking his return to the centre of American power he reluctantly left four years ago. Biden, who invited Trump in keeping with tradition even though Trump did not extend the same courtesy after losing the 2020 election, promised a smooth transition despite the two leaders' long history of mutual criticism and policy differences. “Politics is tough, and it’s many cases, not a very nice world. But it is a nice world today and I appreciate very much a transition that’s so smooth, it’ll be as smooth as you can get. And I very much appreciate that, Joe,” Trump said. The formal transition is stalled until formal agreements, including ethics pacts, are signed as required by the Presidential Transition Act. Earlier, Trump celebrated his victory with House Republicans, who, inching closer to winning a majority, greeted him with a standing ovation. Republicans are expected to win a narrow majority of the House when all the votes are counted. (Capital Brief)

7.

GOP leader: Senator John Thune of South Dakota has been elected as the new Senate majority leader, succeeding Mitch McConnell. Thune, a longtime deputy of McConnell and a free-trade advocate, defeated Senator John Cornyn of Texas and Trump ally Rick Scott of Florida, who was also Elon Musk’s candidate, in a closed-door vote. Thune's win, backed by a reputation as an institutionalist and skilled legislator, is being seen as a sign the Senate could retain some degree of independence from President-elect Donald Trump next year. Thune’s election came despite past tensions with President-elect Trump, including a 2020 disagreement over certifying Joe Biden's victory. Thune recently visited Trump in Mar-a-Lago and expressed willingness to support Trump’s call for recess appointments. The contest highlighted divides within the GOP, with some senators favouring a delay to allow Trump more time to weigh in. (Reuters)(The Hill)(Blomberg)

8.

Regulatory complexity: The Australian Securities and Investments Commission (ASIC) will set up a new taskforce in early 2025 to advise the corporate regulator on how it can more simply and effectively administer the law, chair Joe Longo will say today in a speech. The Simplification Consultative Group will be made up of consumer advocates, business leaders and directors and industry groups, Longo will say in his keynote speech at ASIC's annual forum in Sydney. ASIC is concerned that a complicated patchwork of law reform has led to complexity in the legal system that is not only harder for businesses to comply with, but harder for the regulator to enforce, increasing a risk of consumer harm. The taskforce is due to begin work in the first quarter of 2025 and ASIC expects to announce the membership of the group in the New Year. (Capital Brief)(Reuters)