Australia Briefing
Hello, Rich Henderson in Bloomberg’s Melbourne bureau with the latest headlines...Today’s must-reads:• UniSuper ramps up cash holdings• Dema
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Hello, Rich Henderson in Bloomberg’s Melbourne bureau with the latest headlines...

Today’s must-reads:
• UniSuper ramps up cash holdings
• Demand for Aussie bonds falls
• Australia cracks down on crypto ATMs

What's happening now

UniSuper is ramping up its holdings of cash to navigate market uncertainty. John Pearce, chief investment officer of the A$149 billion fund, said its cash holdings were approaching Covid 19-era levels as Donald Trump’s trade war roils global markets.

Demand for Australian government bonds fell to the lowest level in about six years by one measure. An auction of 12-year bonds received the lowest bid-to-cover ratio — a gauge of investor demand — since July 2019 as large corporates including Commonwealth Bank of Australia also tapped the market, soaking up demand.

The Reserve Bank of Australia discussed the case for an outsized half-percentage point interest rate cut last month, before deciding on a more typical 25 basis point cut. The discussion underscores the weight the RBA is giving to the potential impact of tariffs from Washington.

Australia is cracking down on crypto ATMs. The country’s financial crimes agency has placed a $5,000 limit on cash deposits and withdrawals and refused to renew the registration from one crypto ATM provider after the agency identified scam and fraud-related activity.

Australia has the chance to attract the world’s top talent. President Trump’s crackdown on foreign student visas is an opportunity for Australian institutions, according to Chennupati Jagadish, president of the Australian Academy of Science, speaking on Bloomberg TV’s Australia Ahead.

Click the image to watch. Bloomberg

Concerns over international student numbers have hit the stock market. Shares in listed Australian student placement company IDP Education fell 48% Tuesday, their biggest one-day decline, after warning that global policy uncertainty is hindering the market for international students.

What happened overnight

Here’s what my colleague, market strategist Mike “Willo” Wilson says happened while we were sleeping…

A gauge of the dollar bounced up from about an almost two-year low as US labor figures showed demand for workers remained healthy. Stocks also felt the sugar hit. Aussie and kiwi posted their day’s lows before London closed and spent New York session in tight ranges ahead of Australia first quarter GDP print today. Here, growth is expected to have slowed as households applied the brakes on spending. This speaks to financial markets pricing a 70% chance of a rate cut next month, with economists expecting the RBA to cut rates again if data shows a slowing economy.

President Donald Trump has doubled tariffs on steel and aluminum. Trump signed a directive on Tuesday that will bring the levy to 50% from Wednesday in the US to further support domestic production.

South Korea has a new president. Opposition candidate Lee Jae-myung secured victory as his main rival acknowledged defeat in an election that caps a period of upheaval after previous leader Yoon Suk Yeol’s botched attempt to impose martial law. 

The Toyota group’s proposed $33 billion deal to privatize Toyota Industries is drawing criticism. Investors and analysts have argued that the deal undervalues the company and may be an unpalatable transaction for many shareholders.

US job openings unexpectedly rose in April. The number of available positions rose more than expected in April in a sign of strength despite heightened economic uncertainty.

What to watch

All times Sydney
• 9:00 a.m.: S&P Global Australia PMI Services
• 11:30 a.m.: Gross domestic product

One more thing...

Ukrainian troops have kept up the fight against invading Russian forces for more than three years. They might easily have been routed were it not for Kyiv’s mass deployment of drones. Tens of thousands of the relatively cheap and expendable machines are now buzzing back and forth over the front lines, pinpointing Russian positions, gathering intelligence to anticipate impending assaults, colliding with enemy targets or dropping bombs on them. By early 2025, drones were accounting for 60% to 70% of the damage and destruction caused to Russian equipment in the war, according to UK-based think tank the Royal United Services Institute. 

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