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Speaker 1: Welcome to Fear and Greed business news you can use today.

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Speaker 1: The Reserve Bank leaves interest rates on hold, with little

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Speaker 1: clear direction about whether there'll be any more rate cuts.

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Speaker 1: The corporate regulator ASSEK criticizes private credit players in a

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Speaker 1: benchmark review of financial markets, and the federal government will

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Speaker 1: force electricity suppliers to provide three free hours of energy

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Speaker 1: to households each day. Plus Microsoft's mega deal with a

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Speaker 1: largely unknown Tasmanian data center operator, and the Maldives becomes

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Speaker 1: the first country in the world to outlaw cigarette smoking.

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Speaker 1: It is Wednesday, the fifth of November twenty twenty five.

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Speaker 1: I'm Michael Thompson and good morning, Sean Ayleman.

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Speaker 2: Good morning, Michael.

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Speaker 1: Massive show today Sean the main story this morning. The

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Speaker 1: Reserve Bank has left interest rates on hold as expected,

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Speaker 1: and said that while inflation has picked up more than expected,

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Speaker 1: many of the factors were temporary for the time being. However,

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Speaker 1: interest rates are about where they should be.

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Speaker 2: Yes so the Reserve Bank Governor Michelle Bullock said the

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Speaker 2: cash rate is in the right spot and the Central

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Speaker 2: Bank can shift depending on what happens in the future.

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Speaker 2: There was no discussion in the Reserve Bank board meeting

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Speaker 2: about lifting rates. There's no discussion about cutting rates, just

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Speaker 2: keeping rates on hold. On inflation, the Central Bank has

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Speaker 2: up to its forecast for price rises and expects inflation

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Speaker 2: to be above three percent for much of next year

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Speaker 2: before heading to around two point seven percent at the

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Speaker 2: end of twenty twenty six. Bullok said the inflation rate

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Speaker 2: around the three percent mark just isn't good enough, but

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Speaker 2: she added that she is still confident inflation is coming down,

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Speaker 2: the housing market continues to strengthen. Assign that rate reductions

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Speaker 2: that we've already had the three cuts are having an effect,

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Speaker 2: and the labor market remains tight. But in the Reserve

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Speaker 2: Bank statement, it added a caveat on the employment market,

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Speaker 2: saying there's been a recent easing. So remember we talked

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Speaker 2: about the labor market being tight, Well, it's tight with

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Speaker 2: some easing. In fact, the Reserve Bank does not sound

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Speaker 2: that worried about the labor market at all. Things the

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Speaker 2: unemployment rate will stabilize around four and a half percent.

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Speaker 2: What was really interesting up until now, we've always assumed

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Speaker 2: that monetary policy is restrictive, as in interest rates are

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Speaker 2: detracting from economic growth. The Reserve Bank just questioned that yesterday.

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Speaker 2: That's a little bit more problematic, and if we're at

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Speaker 2: a neutral setting, then that has big implications for whether

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Speaker 2: or not there are rate cuts. Financial market's immediate response

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Speaker 2: was muted. The Aussie dollar didn't move much from sixty

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Speaker 2: five and a quarter US sinse bond nils, which reflect

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Speaker 2: expectations the future rates were largely unchanged, and the AX

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Speaker 2: didn't move on the announcement, though there was of move otherwise.

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Speaker 1: I don't know what to make of this, Sean. How

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Speaker 1: it does are the rate cuts over? You know me,

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Speaker 1: I am painfully optimistic most of the time. I would

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Speaker 1: like to hold on to a bit of hope that

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Speaker 1: we have got maybe still another rate cut to come.

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Speaker 1: But I do we well.

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Speaker 2: If you want to be an optimist. The Reserve Bank,

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Speaker 2: when making its forecasts, reflected what financial markets say. That's

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Speaker 2: put in one more rate cunt okay. That's good. Market

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Speaker 2: economists the consensus there one more rate cunt okay, all right, But.

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Speaker 1: No I knew what was going out to see and

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Speaker 1: he took too much satisfaction in that.

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Speaker 2: I did. Bullocks said, yes, you forecasts are uncertain, and

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Speaker 2: I think that's true. And the fact that they're questioning

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Speaker 2: whether we're at neutral policy now really is something that

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Speaker 2: we're going to have to mull over in coming weeks.

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Speaker 2: Bullocks said that previously the Bank and misjudged supply and

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Speaker 2: demand in the economy. That might be why inflation is

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Speaker 2: higher than expected. Reading between the lines, and that's what

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Speaker 2: market economists are basically paid to do. The consensus is

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Speaker 2: one more rate cut. I think we'll leave it there

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Speaker 2: so that you can walk away happy that there could

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Speaker 2: be one more rate cut. I tell you someone who

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Speaker 2: doesn't think there's going to be.

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Speaker 1: Someone who has a fantastically just just a really frank

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Speaker 1: take on this. Warren Hogan Eco Economics.

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Speaker 2: We speak to him immediately after this show. We've interviewed

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Speaker 2: him after yesterday's at Reserve Bank decision, and he actually

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Speaker 2: thinks the next move might be up. Very in your face,

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Speaker 2: I mean, Warren is fantastic, Like he has called it

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Speaker 2: really well thus far, and he's been on the right

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Speaker 2: side of things mostly in the last couple of years.

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Speaker 2: It's will worth a listen.

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Speaker 1: Yeah, if you want to be blindly optimistic, don't listen

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Speaker 1: to it. But if you actually want good information and

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Speaker 1: to make rational decisions based on kind of a best guess,

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Speaker 1: then have a listen to Warren Is coming up after

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Speaker 1: the show on fear and Greed Q and a onto

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Speaker 1: other stories. There's a lot around today show. The corporate

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Speaker 1: regulator ASSEK has released a benchmark report into private and

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Speaker 1: public markets, things like private credit and equities, and the

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Speaker 1: bottom line is that both are good if done well,

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Speaker 1: but at least in the case of private credit, there

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Speaker 1: is it's really a fair bit of work to get

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Speaker 1: to that point.

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Speaker 2: A lot of work perhaps. ASEK has spent much of

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Speaker 2: this year looking at private markets, including private credit, and

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Speaker 2: says while growing quickly, it is still immature and has

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Speaker 2: been hasn't been tested yet under a stress scenario. It

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Speaker 2: says the sector lacks consistent, well established practices, especially in

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Speaker 2: governance and transparency, fees, treatment of net interest margins, valuation,

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Speaker 2: conflicts of interest, liquidity, and credit management.

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Speaker 1: It's a long list.

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Speaker 2: It's a long list, I quote ASEK. Some of the

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Speaker 2: failings raise questions of compliance with the Financial Services Law

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Speaker 2: and asset guidance, including the obligation to provide financial services efficiently,

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Speaker 2: honestly and fairly. End quote. I'd say that's a whack. Yeah, Yeah,

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Speaker 2: that's a whack for the private credit sector from the regulator.

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Speaker 2: Assex said, it will enforce compliance with financial service laws

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Speaker 2: and increase the division and surveillance of private markets. It's

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Speaker 2: also set out a bunch of prints wolves for private

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Speaker 2: credit operators to follow. A lot in the report around

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Speaker 2: public markets as well. But the real number of it

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Speaker 2: is what they've got to say about private credit, and

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Speaker 2: that sector will read this very closely.

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Speaker 1: It's got to be a good thing then for that sector, right,

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Speaker 1: because it spells it out very clearly what's expected of it.

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Speaker 2: Yeah, and the good operators will be delighted and the

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Speaker 2: poor operators will be struggling.

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Speaker 1: Yeah, okay, now mention this one. In the intro Seawan,

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Speaker 1: the federal government will force electricity suppliers to offer three

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Speaker 1: hours of free power in the middle of the day

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Speaker 1: when demand is low and solar generation is at its peak.

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Speaker 1: This is really interesting.

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Speaker 2: Yeah, So the scheme called solar Sharer incentivizers households to

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Speaker 2: shift their energy usage into the free three hour period.

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Speaker 2: But they must have access to a smart meter to

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Speaker 2: wreck the benefit. So you've got a smart media, you

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Speaker 2: can take advantage of that. It will initially be rolled

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Speaker 2: out in New South Wales, Southeast Queensland and South Australia

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Speaker 2: from the middle of next year. Energy to Chris Bowen said,

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Speaker 2: what's good for the planet is good for your pocket.

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Speaker 2: Though energy companies a little bit less happy complaining about

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Speaker 2: a lack of consultation, there are actually a bunch of

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Speaker 2: electricity providers that actually already do this. They give you

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Speaker 2: the three free hour window that they tend to charge

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Speaker 2: higher rates for energy at other times of the day.

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Speaker 2: But incentives do work, And so if I was working

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Speaker 2: from home, i'd do my washing. If I had a

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Speaker 2: free three hour period, I'd do my washing.

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Speaker 1: Then turn the air cone on and just have three

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Speaker 1: nice cool hours that swell for the rest of the.

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Speaker 2: Day, and just close the windows up.

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Speaker 1: Yeah yeah, I like that, open the fridge as many

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Speaker 1: times as you want in that three hours, and the

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Speaker 1: rest of it, no one's allowed to eat.

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Speaker 2: I like that.

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Speaker 1: It's kind of interesting policy. It's just perhaps a little

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Speaker 1: bit innovative.

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Speaker 2: Dare I say it is innovative, But I mean I

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Speaker 2: also get the energy companies aren't that fast being told

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Speaker 2: that they've got to provide free energy.

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Speaker 1: It's also a good point, Sean, Okay, A massive day,

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Speaker 1: as I said, huge start to the show, plenty more

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Speaker 1: still to come back in a moment with the rest

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Speaker 1: of the day's business news. Sean Barnaby Joyce, the former

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Speaker 1: Nationals leader and maybe a current party member, we think really,

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Speaker 1: I don't know anyway. Yesterday he said what many Conservatives think,

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Speaker 1: the coal fired power is the cheapest available option and

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Speaker 1: is the solution to high energy bills.

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Speaker 2: Speaking to Sky News, Joyce said, we dance around it.

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Speaker 2: Here's the solution. Coal fired power is the cheapest. He

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Speaker 2: also claimed credit for the NATS dropping its net zero

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Speaker 2: policy over the weekend. Meanwhile, the Libs are in all

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Speaker 2: sorts of bother over emissions. Moderate Libel MP Tim Wilson

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Speaker 2: yesterday said the party needs to chart its own course

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Speaker 2: on climate policy rather than defined be defined by the NATS.

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Speaker 2: Another Moderate, Andrew Bragg, said, while it's preferable the coalition

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Speaker 2: say together, it shouldn't happen at any cost. Opposition leader

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Speaker 2: Susan Lee oversaw a joint party room meeting in Camber yesterday.

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Speaker 2: It could not have been comfortable having all the Nats

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Speaker 2: and Lives there, though medi reports say she is likely

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Speaker 2: to drop net zero at some point in the future,

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Speaker 2: not quite yet, but it would have been a difficult

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Speaker 2: joint party room meeting, I'd imagine so uncomfortable.

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Speaker 1: Microsoft has signed a fourteen point eight billion dollar deal

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Speaker 1: to purchase AI cloud capacity from Iron Iran, becoming the

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Speaker 1: Australian company's largest customer. This is a heck of a deal.

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Speaker 2: It is Iron is listed on nasday. Co Chairpi shut

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Speaker 2: up twenty five percent on the news. The five year

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Speaker 2: agreement will provide Microsoft access to Nvideo's advanced chips and

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Speaker 2: demonstrates the AI industry's hunger for computing power to run

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Speaker 2: applications such as chat GPT. So Microsoft is accessing Nvidia's

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Speaker 2: chips via Iron. Partnering with Iron means Microsoft can expand

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Speaker 2: its computing capacity without the new data centers or securing

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Speaker 2: additional power. They're two of the big hurdles slowing all

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Speaker 2: those big companies' ability to meet surging AI demand. Now

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Speaker 2: most of us have probably never heard of Iron. A

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Speaker 2: couple of brothers, Will and Daniel Roberts, hanging out at

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Speaker 2: Macquarie bog Bank, got together that thought, let's create an

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Speaker 2: energy company. So they created Iris Energy. And this is

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Speaker 2: amid the bitcoin mining boom. Quite a few people that

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Speaker 2: went out and did that. So let's creategy because bitcoin

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Speaker 2: needs or cryptocurrencies need a lot of energy and that

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Speaker 2: sort of faded, so they switched to AI services. Now

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Speaker 2: they are worth a mozza. Good on them. This deal

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Speaker 2: making is phenomenal. Like yesterday in the open, AI signed

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Speaker 2: a thirty eight billion US dollar deal to access Amazon

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Speaker 2: Web Services cloud unit for access to hundreds of thousands

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Speaker 2: of n videos graphics processing units. So Iron is in

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Speaker 2: that game at the moment. And what we're seeing with

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Speaker 2: these big tech companies is they're reaching out not just

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Speaker 2: to the Amazons but to the smaller players as well

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Speaker 2: because they need this computing power.

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Speaker 1: It was both the frequency and the scale of these deals.

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Speaker 1: These had a big dollar figures phenomenal now. Sales of

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Speaker 1: new Tesla vehicles fell in October in Australia Sean, reversing

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Speaker 1: what had been a solid rebound for the ev maker.

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Speaker 2: Fingers from the Electric Vehicle Council show nine hundred and

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Speaker 2: sixteen Tesla vehicles were sold in October, down from about

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Speaker 2: fourteen hundred and sixty four the same month last year.

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Speaker 2: On a year to date basis, Tesla sales are down

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Speaker 2: almost twenty seven percent to less than twenty four thousand

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Speaker 2: compared to ten twelve months ago. Global sales at Telstra

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Speaker 2: have actually rebounded more recently, in part because US consumers

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Speaker 2: were racing to buy before a government tax credit expired.

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Speaker 2: THO were here in Australia last month.

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Speaker 1: Not so good, just very quickly. How did the local

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Speaker 1: share market finish up yesterday?

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Speaker 2: I mentioned there wasn't much reaction to the Reserve Bank decision.

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Speaker 2: Most of the fall and the bores had happened ahead

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Speaker 2: of that. It closed down nearly one percent to eight

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Speaker 2: hundred and thirteen points. Sell off across the market. Sea

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Speaker 2: of read Michael Cea of red utilities and material sectors

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Speaker 2: will worst, healthcare stocks did best.

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Speaker 1: Let's turn out to international news. Sean at Wall Street

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Speaker 1: is in the midst of a deal frenzy.

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Speaker 2: Don't you love a frenzy?

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Speaker 1: I do love We've already been talking about aidal frenzy.

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Speaker 1: Now we've got other deal. There's frenzies, the frenzies. There's

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Speaker 1: a frenzy on frenzy, a frenzy square.

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Speaker 2: What is he collective noun for frenzy? A chaos?

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Speaker 1: Frenzies. With three big acquisitions announced over the past thirty

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Speaker 1: six hours, including Kimberly Clark buying the maker of tailanol.

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Speaker 2: Yes, and in fact there's been four deals, so you

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Speaker 2: know when we did this script, there's been another one.

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Speaker 1: That's how quickly they're happening.

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Speaker 2: They're just happening.

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Speaker 1: None Stuff's probably another one by the time you finished talking.

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Speaker 2: That's true. That's true, Kimberly Clark. You know of Huggy's fame.

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Speaker 2: Of course it's spending for a nine billion US on

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Speaker 2: ken View, the maker of thyl and Ole can be

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Speaker 2: used to be with Johnson and Johnson, so it's one.

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Speaker 2: Energy companies companies sm Energy and Civitas have agreed to

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Speaker 2: a thirteen billion dollar US merger. Power Group Eaten acquired

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Speaker 2: liquid cooling company Buoyd Thermal for almost ten billion US dollars.

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Speaker 2: What's interesting is these energy companies and power groups buying

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Speaker 2: cooling companies because one of the biggest issues for these

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Speaker 2: data centers, they're keeping things cool. That's where that iron

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Speaker 2: story comes into it, because they're very good at cool

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Speaker 2: efficient energy. I Digress Goal miner coor Mining purchased a

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Speaker 2: new new Goal for seven and a half billion dollars

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Speaker 2: on Wall Street twenty twenty five. Books like being a

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Speaker 2: record year for large takeovers. According to the FT, part

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Speaker 2: of the reason is that Trump administration is open to deals,

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Speaker 2: making the regulatory burden of m and A much less.

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Speaker 2: Fifty seven US transactions valued at more than ten billion

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Speaker 2: US dollars each have been an ounce so far this year.

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Speaker 1: That is a frenzy, just a solid gold frenzy. Short. Finally,

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Speaker 1: the Maldives or the Maldives how, I don't know how

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Speaker 1: however you want to say it right? I think we

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Speaker 1: all know what we're referring to. Anyway. The country has

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Speaker 1: banned anyone born on or after one January two thousand

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Speaker 1: and seven from smoking tobacco, becoming the only country in

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Speaker 1: the world to enforce a nationwide generational tobacco prohibit prohibition

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Speaker 1: prohib prohibition prohibition.

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Speaker 2: It's kind of like the Maldives or the Maldives the

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Speaker 2: prohibition prohibition.

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Speaker 1: Thank you for drawing attention to that show.

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Speaker 2: The archipelago's health ministry said it would be illegal for

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Speaker 2: younger generations to use, buy, or sell tobacco within the country.

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Speaker 2: No more cigarettes. It follows a general vaping band last year,

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Speaker 2: with the country working towards a generation of tobacco free citizens.

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Speaker 2: The Maldives Health Ministry said it aligns with the country's

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Speaker 2: obligations under the World Health Organization Framework Convention on Tobacco Control.

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Speaker 2: The question we all have because when you think of

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Speaker 2: the mal dives, you immediately think of those beautiful resorts.

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Speaker 1: Are the overwater bungalow overwater bungalows?

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Speaker 2: Oh yeah, tourists. You're caught up to. No smoking from tourists.

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Speaker 2: Mind you, our age probably allows us to do it.

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Speaker 2: But if you're eighteen or younger and next to you

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Speaker 2: nine an or younger, et cetera, et cetera, no smoking.

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Speaker 1: It feels like smoking in a wooden bungalow. It's kind

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Speaker 1: of high risk anyway, right above the water. I suppose

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Speaker 1: it mitigates the risk. Then, Sean, good point.

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Speaker 2: It's good on the mal dives though, Yeah.

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Speaker 1: Yeah, I think that's great. Okay, coming up next, As

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Speaker 1: we mentioned Warren Hogan, economist, great take on what the

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Speaker 1: Reserve Bank is up to at the moment, is coming

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Speaker 1: up next in the Fear and Greed playlist on your

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Speaker 1: podcast platform or at Fear and Greed dot com dot au.

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Speaker 1: And if Sean, I wouldn't normally mention this, but a

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Speaker 1: quick little shout out to our sister podcast how do

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Speaker 1: They Afford That, which comes out today as well, and

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Speaker 1: we actually dive into the topic of is now the

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Speaker 1: time to fix your interest? That's great.

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Speaker 2: Oh, I've been wondering about that, my man mortgage, that

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Speaker 2: very question.

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Speaker 1: Yeah, when we speak to a mortgage broker, someone who

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Speaker 1: spoken to a lot on the show and get some

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Speaker 1: detailed answers to that question, so you'll find how do

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Speaker 1: they afford that? Where you listen to podcasts or put

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Speaker 1: a link in the show notes too. Thank you Sean,

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Speaker 1: Thank you Michael. It is Wednesday, the fifth of November

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Speaker 1: twenty twenty five. Make sure you're following the podcast and

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Speaker 1: please join us online on LinkedIn, Instagram, x TikTok and Facebook.

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Speaker 1: I'm Michael Thompson And that was Fear and Greed. Have

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Speaker 1: a great day.