US Fed chair flags time to cut “has come”

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

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1.

Cut countdown: Federal Reserve Chair Jerome Powell flagged an imminent interest-rate cut during his speech at the US central bank’s annual symposium in Wyoming, marking the clearest indication yet of a policy shift. “The time has come for policy to adjust. The direction of travel is clear,” he said. “The timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks,” he said, noting the progress on inflation while stressing it would “respond” if there was “unwelcome further weakening in labour-market conditions.” Traders’ bets are leaning towards a quarter-point reduction in September and potential for further easing in 2024. US Treasury yields and the dollar fell, and stock markets rose after the speech, with the S&P 500 up 18% so far this year. Escalating tensions in the Middle East could complicate the market reactions in Asia when markets reopen. (Bloomberg)(Reuters)(Dow Jones)

2.

Competition reform: Treasurer Jim Chalmers has released a discussion paper outlining reforms to Australia’s National Competition Policy (NCP), focusing on plans to boost economic dynamism and lower barriers to labour mobility. The paper, co-released with Assistant Minister for Competition Andrew Leigh and state and territory governments, proposes leveraging data, digital technology, and reducing non-compete clauses in employment contracts, according to the AFR. The reforms may also streamline regulations in licensing and improve recognition of overseas qualifications. Around on in five workers is subject to non-compete clauses and 29% are bound by no-poaching agreements. The plan is to modernise the NCP, originally established by the 1993 Hilmer Review, to better suit today’s modern economy. The government is opening a consultation process and says feedback will be reviewed later this year. (Capital Brief)(AFR)

3.

Chalmer’s journey: Treasurer Jim Chalmers is set to visit China in early September, the Sydney Morning Herald reported citing sources. The trip would mark the first Australian treasurer visit in seven years as the two nations work to restore ties after a strained period under the previous Coalition government. The trip comes as China's faltering steel sector threatens to hit Australia's budget via lower iron ore prices that are expected to leave a $3 billion budget hole over the next four years. Chalmers is expected to meet with officials from China’s National Development and Reform Commission in Beijing to discuss the economic outlook, the paper said. The trip follows a June memorandum signed by Chalmers and Chinese Premier Li Qiang to re-establish annual economic talks between the two countries. (SMH)

4.

French Telegram: Telegram's co-founder and CEO, Pavel Durov, was arrested by French police at Le Bourget Airport near Paris on Saturday, according to French television channel TF1 TV and local media. The 39-year-old French-Russian billionaire had arrived on a private jet from Azerbaijan when he was detained under a French arrest warrant linked to Telegram, Reuters reported citing sources. A police source told the news agency the arrest was part of a preliminary investigation into claims Telegram allowed various crimes due to insufficient moderation and failure to cooperate with authorities. The Russian-born Durov lives in Dubai and holds dual citizenship in the UAE and France. He was expected to appear in court on Sunday. (Capital Brief) (Reuters)

5.

Bronfman’s Paramount: Edgar Bronfman Jr’s plans for Paramount Global, if his takeover approach is successful, include partnering with a tech giant like Amazon or Apple to bolster its streaming-TV business, sources told Bloomberg. Paramount’s streaming-TV segment, which earned USD26 million (38 million) on USD1.88 billion in sales last quarter, lags rivals like Netflix and Disney. Bronfman believes Paramount needs better customer acquisition and ad sales capabilities and plans to enhance brand licensing. He submitted a last-minute bid to take control of Paramount. Independent producer David Ellison, his rival, already had a deal that included a “go-shop” period. Paramount’s board will decide on 28 August if Bronfman’s offer is superior, allowing Ellison to counter by 5 September. Bronfman would become CEO and plans to bring former AOL executive Jon Miller and former Turner Broadcasting chief John Martin as executives. (Bloomberg)

6.

Israel-Hezbollah conflict: Israeli warplanes struck over 40 Hezbollah targets in southern Lebanon on Sunday, thwarting what the Israeli military described as preparations for a large-scale attack. Hezbollah said it launched over 320 rockets and drones at Israeli military targets in retaliation for last month’s assassination of a senior commander. The attack killed one Israeli navy officer and wounded two others, though significant damage was largely avoided. In Lebanon, the Health Ministry said that at least three people had been killed and two others injured by Israel’s strikes. Both Israel and Hezbollah signalled a pause in hostilities, while diplomatic efforts for a ceasefire in Gaza continued in Cairo. The clashes, among the most intense in months, have nonetheless heightened fears of a broader conflict in the region. Israel declared a nationwide 48-hour state of emergency. (Capital Brief)(The New York Times)(Reuters)(Bloomberg)

7.

Musk’s rescue: NASA announced it will use Elon Musk's SpaceX Crew Dragon to bring back stranded astronauts Sunita Williams and Barry Wilmore from the International Space Station in February, after technical issues with Boeing's CST-100 Starliner delayed their return. Boeing’s Starliner, plagued by a helium leak and malfunctioning thrusters, will return uncrewed in September. The original mission in June was only scheduled to last eight days. But Boeing’s Starliner mission, billions of dollars over budget, has experienced delays and technical difficulties that mean it doesn’t currently meet the agency’s safety and performance requirements for human spaceflight, NASA officials said. The agency will gather more data to improve the Streamline system, it said. (NASA statement)(FT)

8.

Stab attack: German authorities have identified a 26-year-old Syrian refugee as the suspect behind a knife attack that killed three people and injured eight others over the weekend. The attack took place at a festival in the western city of Solingen. The man turned himself in and admitted responsibility for the attack, which police said targeted victims' throats deliberately. He has remained in custody on suspicion of murder and membership in the Islamic State terror group, which had previously claimed responsibility. German officials also arrested a 15-year-old boy suspected of knowing about the attack beforehand. The incident has sparked calls for stricter knife laws in Germany and may fuel anti-immigration sentiment ahead of regional elections. The suspect arrived in Germany as a refugee in 2022. (Deutsche Welle)