US and China resume trade talks in London

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

---

1.

London talks: Wall Street stocks rose slightly as the US and China returned to the negotiating table in London on Monday in a bid to salvage a fragile trade truce struck in Geneva last month. Delegations led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met at Lancaster House after a phone call between Donald Trump and Xi Jinping revived stalled talks. Starting just after 1pm London time, the talks stretched into the evening and may continue Tuesday. Kevin Hassett, director of the White House National Economic Council, told CNBC the Trump administration expects that once an agreement is reached in London, US export controls would be eased and China would release rare earth shipments “in volume”. When asked for an update at an ‘Invest America Roundtable’ Donald Trump said “we are doing very well with China. China’s not easy… (but) I’m only getting good reports. We want to open up China.” The S&P 500 closed 0.09% higher. Earlier, data showed China’s exports to the US fell 35% in May, the steepest drop since early 2020. (Bloomberg)(FT)(AP)

2.

LA protests: Unrest sparked by Donald Trump’s federal immigration raids in Los Angeles was in its fourth day, with demonstrators blocking freeways, clashing with police, and setting at least five self-driving Waymo cars on fire. Australian journalist Lauren Tomasi was shot by a Los Angeles police officer with a rubber bullet while reporting, prompting the Albanese government to confirm it is in contact. President Donald Trump authorised the deployment of 2,000 National Guard troops to the city, despite objections from California Governor Gavin Newsom, who called the order “unlawful” and vowed to sue. Trump described the protests as “migrant riots”. He said LA “would have been completely obliterated” without military intervention, adding he would support arresting Newsom over his handling of the situation, calling him “an incompetent governor”. When asked what crime would justify arresting him, Trump said: “his primary crime was running for governor.” (SMH)(The Guardian)(Reuters)(Bloomberg)(WSJ)(Gavin Newsom)(BBC)

3.

Listing kickstart: The Australian Securities and Investments Commission (ASIC) says it has agreed on new changes that should cut a week from the IPO approval process for companies looking to float on the ASX. As the corporate regulator reviews public and private markets, ASIC has signalled it will trial changes for the next two years in order to streamline IPOs and reduce the risk of market volatility. ASIC will now informally review offer documents two weeks before public lodgement, a move it says will expedite floats by one week. To do this, it will engage with issuers earlier to reduce the administrative burdens on companies. It will also allow eligible companies to accept retail investor applications during the public exposure period. ASIC said the changes were effective immediately and revealed that it was considering making further improvements. ASIC chair Joe Longo said the changes were to encourage IPOs during a challenging period for new listings. (Capital Brief)

4.

Canberra call-time: Prime Minister Anthony Albanese will use his first major speech since Labor’s 3 May election victory to push back against the “corrosive proposition” that politics, government and democratic institutions, including a free media, are incapable of meeting the demands of this moment. According to a prepared speech at the National Press Club seen by Capital Brief, ahead of a trip to the US and Canada for the G7 summit, the prime minister will say the government’s second-term agenda is focused on delivering “urgent necessities” such as Medicare, universal childcare, cost of living relief, and emissions targets. Albanese will also present Australia as having a “comparative advantage” in critical minerals and manufacturing. A meeting with Donald Trump is expected during the trip, with trade, tariffs and defence on the agenda. (Capital Brief)(Capital Brief)

5.

Bracket creep: Economists are split on the Coalition's dumped indexation policy, with some saying it didn't go far enough and others cautioning against providing tax relief during periods of high inflation. While economists are broadly supportive of indexing income tax brackets, a proposal put forward by former shadow treasurer Angus Taylor in the months leading up to the election campaign (to provide an automatic tax rebate tied to high inflation) would not have resulted in a groundswell of support from experts. The proposal, revealed last week by Capital Brief, was ultimately rejected by then-opposition leader Peter Dutton’s office and would have given a tax rebate to workers when inflation surged above the top of the Reserve Bank’s target band of 2% to 3%. Dutton instead opted for a halving of the fuel excise as the centrepiece of his cost of living pitch to the public. (Capital Brief)

6.

Israel conflict: Israeli forces intercepted and boarded a yacht carrying a group of activists en route to Gaza on Monday, which had intended to deliver aid to the enclave in defiance of Israel’s ongoing blockade. The group of 12, which included climate activist Greta Thunberg, was intercepted in international waters and is being transported to a port in Israel. Activists on board documented the incident, sharing images and videos on social media with their hands in the air after tossing phones and laptops overboard. Israeli Defence Minister Israel Katz had ordered the military to prevent the boat, named the Madleen, from reaching Gaza, calling the mission propaganda supporting Hamas. Katz said that he has ordered the activists to be shown videos of atrocities committed during the October 7, 2023 Hamas-led attack on southern Israel. Freedom Flotilla organiser Huwaida Arraf said: “Israel has no legal authority to detain international volunteers aboard the Madleen.” (Reuters)(WSJ)(Bloomberg)(Freedom Flotilla)

7.

Translate this: Apple unveiled new live translation capabilities, group-chat upgrades and what it called its “broadest design update ever” at its annual Worldwide Developers Conference. It introduced a “Foundation Models framework” allowing developers to use Apple’s AI models on devices without internet or cloud costs, and renamed its operating systems with year-based titles such as iOS 26. But a planned Siri upgrade wasn’t announced, with Apple’s senior vice president of software engineering, Craig Federighi saying the tech giant needs “more time to meet our high quality bar.” Apple’s shares fell more than 1%. (AP)(Bloomberg)(WSJ)

8.

Screen schism: Warner Brothers Discovery will separate its streaming and studios business and its TV networks operations into two publicly traded entities by the middle of 2026, unshackling its streaming business from legacy media channels. A statement released by the company on Monday says that the Streaming and Studios company will consist of Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, and HBO Max, as well as their film and television libraries. Global Networks will retain entertainment, sports and news television brands including CNN, Discovery and European free-to-air channels. First revealing plans to split in mid-2024, the media giant said the separation will unlock value for shareholders and opportunities, breaking up the group that was formed three years ago from the merger of Warner Media and Discovery. An internal memo from Warner Bros CEO David Zaslav to staff acknowledged that “work since that merger has been challenging at times.” (Capital Brief)(Warner Bros)(WSJ X post)(FT)