Trump pressures Ukraine to accept 28-point peace plan

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

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1.

US pressure: Ukrainian President Volodymyr Zelensky said he would never betray Ukraine as Trump gave Ukraine until Thursday 27 November to accept a 28-point Ukraine-Russia peace plan proposed by the US administration. European leaders on Friday rejected key elements of the plan, agreeing that Ukraine’s armed forces must remain capable of defending its sovereignty and that the current line of contact should be the starting point for any peace talks. Under US President Donald Trump’s 28-point plan, the regions of Crimea, Luhansk and Donetsk would be “recognised as de facto Russian, including by the United States,” Ukraine would have to hold elections in 100 days, abandon plans of NATO membership and drastically reduce the size of its armed forces. These significant concessions to Russia from Ukraine have been long rejected by Kyiv. Reuters reported that the US threatened to stop intelligence sharing and weapons supplies to Ukraine and pull out of all processes unless Kyiv agrees to the deal. In a press briefing on Friday, Zelensky said: “Now, Ukraine can face a very difficult choice — either losing dignity or risk losing a major partner”. (Bloomberg)(NYT)(FT)(Reuters)(Capital Brief)

2.

Chip control: US officials are weighing whether to let Nvidia sell its H200 artificial intelligence chips to China, according to sources cited by Bloomberg, in a move that would mark a major win for the world’s most valuable company. A final decision has not been made and sources said it is possible that the idea remains an internal debate and never results in actual license approvals, which are required under export controls that Washington first imposed in 2022. In a statement to Bloomberg, Nvidia said the current regulatory landscape doesn’t allow it to offer a competitive data centre product in China, “leaving that massive market to our rapidly growing foreign competitors…Our foreclosure from the China data centre compute market has no impact on our ability to supply customers in the USA.” The move is a departure from the Trump administration’s previous position on semiconductor export controls and is likely to draw opposition from China hawks in Washington. (Bloomberg)(Capital Brief)

3.

Rates watch: Global brokerages are divided on whether the US Federal Reserve will opt for an interest rate cut in its December meeting or keep policy rates unchanged, as mixed signals on job growth and unemployment earlier this week cloud the outlook. Morgan Stanley, JP Morgan and Standard Chartered have dropped expectations for a December Fed rate cut, while Deutsche Bank, Citigroup, Wells Fargo and HSBC still see a quarter point cut but note odds of a hold have risen sharply. US Fed governor Stephen Miran on Friday said he would vote for a 25 basis point cut if his vote meant the difference in securing a rate reduction, NY Fed president John Williams also said there is room to cut again while Dallas Fed chief Lorie Logan and Boston Fed chief Susan Collins called to hold rates steady. S&P Global data released Friday saw US business activity expand by the most in four months in November, ticking up 0.2 points to 54.8. However, data from the University of Michigan showed weakening consumer sentiment across the US, as Americans remain anxious about the high cost of living and job security. (Reuters)(UoM)(S&P Global)(Bloomberg)

4.

Irate investors: Treasurer Jim Chalmers’ decision to kill private equity-backed Cosette Pharmaceuticals’ $600 million acquisition of Mayne Pharma has left shareholders in disbelief after recent regulatory orders appeared to pave the way for the deal to get over the line. On Friday, Cosette finally escaped from the deal seven months since signalling its first termination attempt. Chalmers adjudged that the transaction was not in the national interest because of a threat to close Mayne's Adelaide manufacturing facility. Manoj Jain, co-chief investment officer of Hong Kong-based investment firm and Mayne shareholder Maso Capital, told Capital Brief that “the equity risk premium to invest in Australia has now materially increased.” Brett Wells, an anaesthetist and Mayne shareholder through his family office, described the decision as “incompetent” and is considering launching a class action lawsuit against Mayne for not informing the market immediately after it became aware that Cosette had told FIRB it had changed its intentions for the Salisbury facility. (Capital Brief)

5.

Weak week: Stocks rebounded on Friday, with the Dow industrials clawing back losses from the previous session, after New York Federal Reserve President John Williams said he would back another rate cut in the near term. The gains end a volatile week which saw investors grapple with towering technology valuations and AI spending plans. The S&P 500 and Nasdaq composite closed up 0.98% and 0.88% respectively, while the Dow capped the week up 493.15 points. The rebound wasn’t enough to snuff out declines notched earlier this week, with the three major indexes remaining down 1.9% or more over the five-day period. Wall Street’s ‘fear gauge’ the VIX, remained at an elevated level near 23. Bitcoin slid as much as 7.6% to USD80,553 on Friday before paring losses, and is heading for its worst month since the crypto collapse of 2022. Eli Lilly became the first pharmaceutical company to hit USD1 trillion in market capitalisation as the market for weight-loss drugs continues to boom. (CNBC)(WSJ)(Reuters)

6.

VC shortfall: Despite new modelling suggesting superannuation funds are collectively $54 billion short on venture capital allocation, the industry's biggest players each insist they're actively backing Australian startups, though some admit they are being hampered by regulation. Hostplus chief investment officer Sam Sicilia argues that current regulatory settings are making investment into startups and high-growth private companies appear less attractive than they really are. Sicilia told Capital Brief that ASIC’s Regulatory Guide 97 (RG 97) along with the Australian Prudential Regulation Authority’s (APRA’s) Your Future, Your Super (YFYS) performance test made investment into startups less attractive in the short term despite delivering strong long-term benefits. Not all funds agree, with an Aware Super spokesperson saying the fund has invested in Canva, Safety Culture, Culture Amp and Zoox, while Brighter Super said that its private equity portfolio had allocated 24% to venture and growth-stage investments both in Australia and internationally. (Capital Brief)

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Heavy metals: Northern Minerals said it has uncovered evidence of Chinese interests defying orders from Treasurer Jim Chalmers to divest their shares and has requested to postpone its AGM pending the investigation. The rare earths producer said via an ASX filing on Friday afternoon that it has referred its concerns to the Foreign Investment Review Board. The update is a dramatic escalation of tensions between Australia and China over efforts to end Beijing’s stranglehold on supply of heavy rare earths used in modern weapons systems, The Australian reported. Northern Minerals acted after taking a closer look at its share register while finalising USD250 million ($387 million) in funding from the Export-Import Bank of the US. The heavy rare earths from Browns Range are earmarked as feedstock for Australia’s first fully integrated refinery being built by Iluka Resources in WA with $1.65 billion in taxpayer finance, the masthead wrote. Northern Minerals suspects Chinese interests instructed to sell may have instead shifted their shares to related entities. (ASX)(The Australian)

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Connecting Africa: The European Union pledged €7 billion ($12.48 billion) toward boosting renewable-energy generation and increasing electricity access in Africa. “We are turbo-charging Africa’s clean-energy transition,” European Commission President Ursula von der Leyen said on Friday, “Millions more people could gain access to electricity.” Von der Leyen made the announcement in Johannesburg, one day before a G20 meeting takes place in the city. The commitment comes as part of the 'Scaling up Renewables in Africa' campaign launched in November 2024 which aims to bring power to the almost 600 million people in Africa without access to electricity. The World Bank and African Development Bank also agreed to align their Mission 300 program with the EU campaign. The amount adds to earlier pledges, bringing the amount committed toward the campaign to €15.5 billion, with all but about €400 million of that coming from the EU. (European Commission)(Bloomberg)(Euractiv)