Australia Briefing: Interest Rates in Brief

(Bloomberg) — Hi, this is Ainslie here in Sydney. Here’s what you need to know to catch up after the long weekend.

Inflation Watch: Australia’s inflation data will be out tomorrow, with the core indicator set to breach the upper limit of the Reserve Bank’s 2% to 3% target for the first time since 2010. This will put more pressure on policy makers to make the rare decision to raise rates during an election campaign.

Dollar gains: Inflation data could also mean the Australian dollar is rebounding after four weeks of losses, economists say.

Election update: Over the long weekend, Labor pledged to increase funding for health and welfare programs for veterans and Indigenous peoples. Prime Minister Scott Morrison, meanwhile, has pledged to limit the country’s tax revenue if his party wins re-election.

Red line: On the China issue, Morrison said a military base in the Solomon Islands would be a “red line” for his government, while his US ally Japan became the latest to send an envoy to the country on the issue. Read more on the subject in our QuickTake here.

Coal’s Second Wind: The world’s reliance on coal, a fuel many thought would soon be on its way out, is stronger than ever, spurred by Russia’s war on Ukraine. Australia is a key exporter of the world’s dirtiest fuel, and its benchmark futures prices, which rarely exceed $100 a metric ton, hit a record high of $440 after the invasion.

Around the world

Elon’s Big Deal: After weeks of speculation, Elon Musk has agreed to buy Twitter for $44 billion to take it private. The deal has been unanimously approved by the company’s board of directors and is expected to be finalized later this year. Musk criticized the company’s algorithms and hinted at his plans for the social network. “Free speech is the foundation of a functioning democracy, and Twitter is the digital public square where issues vital to the future of humanity are debated,” the billionaire said.

Corruption in China: President Xi Jinping’s corruption crackdown on the country’s financial sector hit at least 17 officials in April. Among those trapped is a former official of the national market regulator, suspected of taking bribes.

No confidence: Sri Lanka’s opposition party said it had more than enough legislative support to introduce a vote of no confidence in the government, raising the stakes for the administration controlled by President Gotabaya Rajapaksa and his brother Prime Minister Mahinda Rajapaksa.

Self-censorship: The Foreign Correspondents’ Club of Hong Kong has announced that it will “suspend” its annual human rights press awards this year due to fears of possible violations of the national security law imposed on the city ​​by China in 2020.

Defiant Trump: Donald Trump has been held in contempt of court for failing to turn over records as part of an investigation by the New York Attorney General into his real estate empire. He was fined $10,000 a day until he produced the documents.

What to watch

  • South32 and Woodside Petroleum release sales and revenue figures

One more thing…

Archaeologists have unearthed the ruins of a temple dedicated to the ancient Greek god Zeus in Egypt’s Sinai Peninsula. The ruins were discovered at the archaeological site of Tell el-Farma in northwest Sinai, the Ministry of Tourism and Antiquities said in a statement, AP reported. Tell el-Farma, also known as Pelusium, dates back to the late Pharaonic period.

And with that, have a great Tuesday.

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Leslie M. Gill