Plus: China warns US of retaliation over Trump’s new tariff threat; Trump dismisses China threat with ‘It’ll be fine’ post; Ripple warns Treasury of draft crypto law risks.
Good morning. Here’s what happened overnight and what you need to know today.
1.
Truce holds: A ceasefire between Israel and Hamas held for a third day on Sunday, ahead of the expected release of Israeli hostages and Palestinian prisoners and the arrival of Donald Trump in Israel. Under the first phase of the US-brokered agreement, Hamas is due to release 20 living hostages Monday as well as the remains of 28 others. Israel, meanwhile, will free nearly 2,000 Palestinian prisoners. Trump will address the Knesset in Jerusalem before travelling to Egypt, where he will co-host a summit with President Abdel-Fattah el-Sisi (and where three Qatari officials were killed in a car crash). Leaders including UK Prime Minister Keir Starmer and French President Emmanuel Macron are expected to attend. UN officials said aid, including cooking gas for the first time since March, entered Gaza on Sunday, the Associated Press reported. But the truce seems fragile, with reports that Hamas forces have redeployed in areas vacated by Israel and reasserted control. Palestinian official Hussein al-Sheikh said the Palestinian Authority is ready to work with Trump, Tony Blair and other partners to consolidate the ceasefire, enable the entry of aid, support the release of hostages and prisoners, and begin reconstruction. Meanwhile, tens of thousands protested in Sydney and Bern, with some expressing scepticism the truce will hold. (Reuters)(AP)(Bloomberg)(FT)
2.
Trade war: China urged the US to stop threatening it with higher tariffs and requested further negotiations to address outstanding issues on trade, warning that it will not hesitate to retaliate should the White House persist with upping punitive tariffs against Beijing. The warning released by China’s Ministry of Commerce on Sunday followed Trump’s Friday announcement to slap an additional 100% tariff on China as well as export controls on “any and all critical software” beginning 1 November, hours after threatening to cancel an upcoming meeting with Chinese leader Xi Jinping. China also added port fees on US ships, launched an antitrust probe into Qualcomm’s July purchase of Autotalks and new rare earths and critical minerals export curbs. China’s Ministry of Commerce said that: “If the US persists…China will resolutely take corresponding measures to safeguard its legitimate rights and interests.” (Bloomberg)(Commerce Ministry)(WSJ)
3.
No worries: Crypto markets rebounded on Sunday (Monday AEDT) after Donald Trump attempted to calm investor trade fears. “Don’t worry about China, it will all be fine!” he posted. “Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!” Crypto traders interpreted the comments, coming after the trade tensions between the world’s largest economies sent shockwaves across markets Friday, as a de-escalation. Bitcoin rose 1.9% in 24 hours to trade around USD114,359 ($174,460) after plunging to USD104,782 on Friday. Other cryptocurrencies also rallied. Ethereum climbed more than 20% from its Friday low of USD3,637 to reclaim the USD4,100 level. (TheStreet)(BetInCrypto)
4.
Crippled crypto: Ripple’s global head of policy urged Treasury to amend a section of its draft digital assets legislation, warning it may unintentionally cause emerging crypto companies to go bust. The new framework does not allow crypto businesses enough time to apply for and obtain the newly required Australian Financial Services Licences (AFSLs), which Ripple’s Rahul Advani says can take more than 18 months to secure. Last month, Treasury released an exposure draft of the long-anticipated legislation, which designates “digital asset platforms” and “tokenised custody platforms” as financial services to be regulated by ASIC. Crypto companies will need AFSLs to offer such products. Breaching ASIC rules could result in penalties of “up to the greater of $16.5 million, three times the benefit obtained or 10% of annual turnover”. Unlicensed businesses will have six months to apply for an AFSL or vary an existing one, Advani said, despite the process typically taking 12-18 months or longer. (Capital Brief)
5.
Cyber hack: Qantas said customer data stolen during a cyber incident in July was released online and that it is working with security experts and Australian authorities to determine the extent of the exposure. In a statement released Sunday, the airline said 5.7 million customer records were leaked on the dark web, with most information limited to names, email addresses and frequent flyer details, the airline said. A smaller portion included addresses, dates of birth, phone numbers, gender, and meal preferences. Qantas said no credit card, passport or login details were accessed, and that there had been no impact on frequent flyer accounts. The leak comes after criminal group Scattered Lapsus$ Hunters threatened to release the data stolen from 39 Salesforce clients unless the software company paid a ransom, which it refused to do. Transport Minister Catherine King advised Australians to change their passwords, enable two factor verification and never click on unknown links in emails. (Bloomberg)(The Australian)(AFR)(ABC)(Qantas)
6.
Disputed waters: Manila and Beijing traded blame over responsibility for a maritime collision between military boats in the South China Sea on Sunday. The Philippines said that a Chinese Coast Guard (CCG) ship “fired its water cannon” at a ship belonging to Manila’s fisheries bureau at 9:15am (12:15pm AEDT). Jay Tarriela, Philippine Coast Guard spokesperson, said that just minutes after the Chinese vessel fired its water cannons, “the same CCG vessel deliberately rammed the stern of the BRP Datu Pagbuaya, causing minor structural damage but no injuries to the crew.” The incident took place in the Spratly Islands in the South China Sea, a contested waterway where Beijing has repeatedly sought to assert sovereignty. Liu Dejun, spokesperson for the CCG, said that official Philippine vessels illegally entered the waters without the permission of the Chinese government. “The full responsibility lies with the Philippine side,” Liu stressed. (Philippine Coast Guard)(Xinhua)(Capital Brief)
7.
Wild earnings moves: Investors are positioning for major earnings-day stock swings, with options on S&P 500 companies implying an average 4.7% move after results, Bloomberg reported citing its own data. That’s close to levels seen in July, when anticipated earnings-season moves were the highest at the start of a reporting cycle since 2022, using JPMorgan’s earnings as the kickoff. The renewed pricing surge highlights investor unease as earnings begin again, with the market recently coming off a record high before falling 2.7% on Friday after Donald Trump threatened new tariffs on China. Ongoing concerns about a possible US government shutdown, fallout from Trump’s trade policies, and growing questions over AI stock valuations are among the factors driving the surge in options prices and volatility expectations. Mandy Xu, Cboe’s head of derivatives market intelligence, said volatility is being priced in heavily at the single-stock level, especially in AI and tech. UBS and Citigroup said post-earnings volatility has trended higher since 2021. (Bloomberg)
8.
Mea culpa: Deloitte apologised and said it will discipline staff after admitting it failed to follow its own oversight processes on a $440,000 federal government report that contained errors produced using AI. The more than 200-page report, commissioned by the Department of Employment and Workplace Relations, was withdrawn and corrected after University of Sydney academic Chris Rudge identified multiple problems including fake academic references, a fabricated Federal Court quote and typos. Deloitte said the corrected version did not alter the report’s 46 recommendations or findings, which DEWR said it would still adopt. The firm said it had taken “appropriate actions” and reiterated its apology. Elsewhere, former ACCC chair Allan Fels called for a review of Optus’s eligibility for future government contracts, after it emerged Optus has received more than $900 million in contracts since an earlier 2023 outage. (AFR)(The Daily Telegraph)
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