Bitcoin rises as US policy hints, markets fall on plan to weaken Iran's economy

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The United States is urging allies to join it in a bid to "collapse" Iran's economy to end the Middle East conflict.

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By David Taylor

The National Australia Bank (NAB) provides regular commentary on the outlook for the economy.

Here's its latest "Forward View" report:

Economy to slow but not by too much.

We expect a small positive for Q2 GDP growth (released in early Sept). We expect the detail of the accounts to support the narrative of some slowing in growth in H1 but also to reflect the fact that the impact of the Middle East has been less than initially feared thus far.

More jobs to go but not too many.

Our forecasts are largely unchanged; we expect a gradual moderation in inflation and unemployment to drift higher alongside a period of below trend growth.

RBA's next move to be down?

We continue to see the RBA on hold through 2026 and the next move in rates to be down, expecting a gradual normalisation in policy from mid 2027.

By David Taylor

Property website realestate.com.au has published the top suburbs where "buyers can find the largest share of homes with a $1M or below budget."

Key data findings:

Key Event

By David Taylor

US Treasury yields, or the cost of US government, is climbing.

In fact, if you look at the multi-decade chart you can see the cost of US debt is at or around levels just prior to the global financial crisis.

As I write, the 10-Year US Treasury is 4.70%. It hit 5.03% in April 2007.

Westpac has some thoughts:

"Bond yields have been rising in recent weeks, especially at the long end of the maturity spectrum. We have long believed that the global structure of interest rates would have a higher centre of gravity in future than it did in the period between the GFC and the pandemic. The factors often cited for the recent rise in yields – larger government deficits globally, the investment boom from AI – were already behind this judgement."

Westpac is forecasting more US government intervention to support short-term interest rates or stabilise global markets more broadly.

This can also feed through to lowering longer-term bond yields.

"Higher yields mean higher debt-servicing costs, particularly for the US government. Expect more manoeuvres like the US Treasury supporting the yen by selling euros not dollars, as well as the buy-back operation this week. These are merely stop-gaps rather than a lasting solution like genuine fiscal consolidation. "

The higher US bond yields climb, the more government borrowing costs increase, the higher bond yields potentially climb.

It's a nasty feedback loop.

"Offshore, we can see higher yields constraining policy decisions by the US government and can expect more on this front. The US government’s debt-servicing costs are becoming more burdensome as large deficits persist and yields rise. Just in the past few weeks, we have seen some unusual currency interventions by the US Treasury, followed by buy-backs designed to shorten the maturity profile of US government debt and lower the term premium paid. And while we expect the Fed will not fold in the face of pressure to keep rates low, we can well imagine the content of the phone calls between FOMC Chair Warsh and President Trump. Expect more manoeuvres by the US authorities along the lines seen recently. These are merely stop-gaps, though, not lasting solutions like genuine fiscal consolidation."

By David Taylor

Thought that might lure you in.

David Taylor here to take you through the afternoon on bonds, yields, shares and anything remotely interesting.

Join me.

By Daniel Ziffer

Our $1 trillion government debt is not a "flashing red" signal, says Martin Whetton from Westpac financial markets strategy team.

Questioned by Alicia Barry this is a really great explainer of the bond market, US and Australian government debt and what it means for consumers.

Watch The Business, Mondays to Thursdays 8:44pm on ABC News Channel, after the Late News on ABC TV, and anytime on ABC iView

By Daniel Ziffer

What are the consequences of access your super savings early?

Australians are generally required to keep their super locked away until retirement, with early access allowed only in a narrow set of circumstances.

But we had a COVID-era experiment of letting people in to the accounts.

Now, the issue of when and why people should be able to dip into their retirement savings has become a political battleground.

Our colleagues Lin Lin and Gareth Hutchens have put together this handy explainer to break it down.

By Daniel Ziffer

Last night on 'The Business' Martin Whetton from Westpac financial markets strategy team took apart the US bond market with Alicia Barry.

It's a great explainer.

Here are some of the key takeaway points:

"$85 billion a day the US government's paying its bondholders, its lenders, as is the technical term.

"And so that's obviously a lot, but it's not a lot relative to the size of how much debt they have. But that has jumped up pretty sharply from an average of around $20 billion two to three years ago.

"Now, as you say, the bond markets have been flashing red. What's been happening is there is a concern over inflation.

"There's a concern over lack of forward guidance from the Fed as to what they'll do on policy. There's an expectation of a rate hike, but there is still inflation and they're not combating that.

"There is quantitative tightening, so the central bank is reducing its holdings of government debt, so reducing its balance sheet.

"And then you've got the government itself borrowing money, plus you've got this new cohort of the hyperscalers who are around half a trillion dollars this year and about the same last year, whose credit ratings are extremely high, whose business models are very good.

"And they come at a yield over the government curve. And so investors who need to buy bonds for part of their superannuation portfolio or for regulatory reasons are saying, 'Well, I'd rather actually lend my money to Google or Meta or others rather than give it to the US government or in some countries, the sovereigns there'.

"And it's actually worth noting that yesterday Google or Alphabet was able to issue $5.5 billion Australian dollars in the market here. It's the largest ever corporate bond deal that we've seen by quite a margin.

"But the fact that it saw about $20 billion worth of orders suggests very, very high demand, again, for Australian dollars and the assets here, even though the company itself is not an Australian company.

Watch The Business, Mondays to Thursdays 8:44pm on ABC News Channel, after the Late News on ABC TV, and anytime on ABC iView

By Daniel Ziffer

Here's Origin CEO Frank Calabria:

“While the criminal investigation into this incident remains ongoing, Origin is confident in the steps we have taken to respond.

“We have substantially completed our review into the information accessed for each affected customer, and our priority is completing our notifications to them and providing support.

“We have taken a number of steps to enhance the security of our systems to prevent future incidents of this kind.

Origin says that for most of the approximately 900,000 affected customers, information accessed included some combination of name, address, date of birth, contact phone number, account and other information about the customer’s personal circumstances which they had shared with us, as well as the last four digits of a credit card, or the last three digits of a bank account.

But there were customers more exposed:

"For a smaller subset of these customers, we have identified that some additional information was accessed, including:

"In some cases, other contacts were listed on the customer’s account, including information such as name, contact number, date of birth and email address. Where possible, we will be directly notifying those other contacts to let them know their information was accessed and to provide support.

Origin says it has made "specialist identity and cyber support services available, including identity monitoring and 12 months of free credit monitoring".

It recommends all customers continue to remain vigilant to suspicious activity and the heightened risk of scams and take the following steps out of caution:

By Daniel Ziffer

More news on a hack of personal customer data from energy company Origin.

"Origin’s review into the specific information accessed for customers affected is now substantially complete.

"Origin has contacted the approximately 900,000 current and former customers whose information was subject to unauthorised access and provided them with support.

"We have now confirmed the specific types of information that have been accessed on a customer-by-customer basis, and are well advanced in providing further specific notifications to each affected customer.

"Those specific customer notifications include details of the information that has been accessed, advice on the practical steps they can take and the various supports available.

"Origin has taken a number of steps to enhance the security of our systems to prevent future incidents of this kind, with the support of external cyber security and forensic specialists.

"The incident remains subject to an ongoing criminal investigation. Origin continues to work closely with the Australian government and other agencies including the Australian Cyber Security Centre, the National Office of Cyber Security and the Australian Federal Police.

Here's what we knew a few days ago:

By Daniel Ziffer

It's not over yet for troubled media brand ARN, whose share price has plunged -45% in the past year as it all blew up.

In newly released results it discusses reaching a resolution with former star Kyle Sandilands with a "cash payment of $12.09 million payable over an agreed period". That much was known.

"The resolution of one legacy matter reduced uncertainty and management distraction, allowing greater focus on execution of the Australian business strategy, which a separate matter remains ongoing".

That would be the legal action of his long-time off-sider Jacqueline 'O' Henderson.

Last year I wrote about this predicable disaster. Enjoy.

By Daniel Ziffer

To give it props, Australian food brand Guzman y Gomez tried to sell Mexican food to the US market.

Despite throwing everything at it, including the CEO heading to the Illinois suburbs for a few months, it failed.

(They shouldn't feel too bad. US behemoth Taco Bell is on its expensive third go at cracking the Australian market).

In today's results, we get the cost: $67.3m in "loss from discontinued operations".

Other markets do better. In Australia, it has 162 franchises and 93 corporate-owned stores, with sales over a billion ($1.29b), up 17.9%.

That growth rate was matched in Singapore and Japan; there are 32 stores.

By Daniel Ziffer

The flagship ASX 200 index has defied futures market predictions to be +0.33% up at opening, lifting 30 points to 9,083.8 points.

Key Event

By Michael Janda

As a complete dunce as far as bond markets are concerned , can someone explain the process whereby the U S government is ‘buying back debt’. Where does the money come from to do that ?

- Phillip

Hi Phillip, great question.

I don't profess to be a bond expert, but my understanding is that Scott Bessent is getting the US Treasury to issue more short-term debt to buy back the long-term debt.

That obviously pushes short-term interest rates up, but with the hope of pulling those longer-term interest rates down and "flattening the yield curve" as the financial pros would call it.

(Long-term interest rates are generally higher than short-term ones as you are taking greater risks over a longer horizon about default and whether inflation may wipe out your real returns).

Rabobank's senior US strategist, also named Philip (Marey), has described what Bessent is doing as a "game of chicken" against the bond vigilantes on the trading desks.

"The ultimate problem with the Treasury's intervention is that it costs money. For now, this can be solved by issuing shorter-term debt instead of longer-term debt," he wrote.

"However, because the total amount of federal debt is constrained by the debt ceiling, the Treasury Department could ultimately run out of ammunition.

"In fact, the debt ceiling is expected to be reached in 2027. By then, the Democrats could have taken the House of Representatives and make it very difficult for the Republicans to raise the ceiling.

"Moreover, it remains to be seen if enough Republicans are willing to raise the debt ceiling without any attempt to stabilise the fiscal trajectory of the United States.

"This means that there is a limit to Bessent's buybacks. In contrast, the central bank is in a better position to play a game of chicken with the bond vigilantes."

He thinks there's a chance that the Fed will be forced to step in to keep longer-term bond yields in check.

"If the Treasury runs out of firepower and yields spike again, the Fed may feel compelled to step in and buy these bonds," he wrote.

"Unlike the Treasury, the Fed faces no limits on the scale of its interventions, giving it far more credibility in a standoff with market forces."

Hope that makes things a bit clearer, Phillip?

By Daniel Ziffer

Coming off the back of yesterday's unemployment data, an interesting response from Swinburne economics expert Professor Abbas Valadkhani.

He says our rising unemployment rate could be the first sign of a much more difficult economic problem, with higher oil prices threatening to leave the Reserve Bank caught between rising inflation and rising joblessness.

It's all linked.

"If higher energy and living costs feed into wage demands, and higher wages then feed into rents, hospitality, health, education and other services, the initial oil shock can become embedded in domestic inflation."

He calls it "cost-push rather than demand-pull" inflation, with higher oil prices raising energy, transport and production costs even as domestic demand weakens.

Service prices are heavily influenced by labour costs and are therefore much more persistent and stickier.

"This creates a difficult policy dilemma for the RBA. With demand-pull inflation, higher interest rates can relatively effectively reduce aggregate demand and inflation. But tightening policy in response to a supply shock risks reducing output and employment without immediately eliminating the underlying source of inflation."

By Daniel Ziffer

Government debt has briefly hit $1 trillion, but is set to dip lower.

Last night on 'The Business' Martin Whetton from Westpac financial markets strategy team took it apart with Alicia Barry.

He's unconcerned by the figure, pointing out that the Australian Office of Financial Management (AOFM — the Treasury Department that borrows money on behalf of the country) issued $13 billion of debt which matures in May 2038.

"It had $62 billion worth of interest from global investors, showing that Australian debt — even hitting a trillion dollars or coming close to a trillion dollars earlier in the week — is not something that people don't want to invest in."

Here are some of the key takeaway points:

"So the number, look, it's a number that obviously politicians will want to discuss, and the public will feel fearful about.

"The reality of it is it's not like it's a mortgage where you've suddenly hit a new number of a high and you've gotta pay it back to the bank that you've borrowed it from.

"We pay debt back as it matures, and we borrow new money along the way, which those funds are used for debt.

"So it shouldn't be seen as something that is a stick to beat governments of persuasion.

"I guess what the concern people have had is the rise or the pace of that debt rise and what does it mean for the overall cost of money through to households.

Watch The Business, Mondays to Thursdays 8:44pm on ABC News Channel, after the Late News on ABC TV, and anytime on ABC iView

By Daniel Ziffer

The CommBank Household Spending Insights is one of my favourite data sets — an anonymised look inside the wallets of seven million CBA customers.

The headline is that in the series, spending rose by 0.6%/month in July, an increase in the pace of growth after a 0.3% lift in June and a 0.2% increase in May.

Year-end growth also picked up slightly from 5.3% in June to 5.6% in July on a seasonally adjusted basis.

And here's how we make the GIF work.

"The strength in Recreation and Hospitality indicates that households are still prioritising experiences despite downward pressure on their incomes and housing prices. Spending on the FIFA World Cup, which ended 19 July, and the Odyssey movie likely supported spending over the month."

I haven't seen it yet, and I'm aware that the source material was published a little while ago, but please, no spoilers.

By Daniel Ziffer

A great read from Ian Verrender on the bond market, debt and why $1 trillion starts to look like a pretty small number from certain angles.

If you don't understand the recent US intervention, this is a top explainer.

By Daniel Ziffer

Medibank Private CEO David Koczkar was our guest on 'The Business' last night.

Interestingly, he spoke a lot about prevention and how to reduce health spending.

Here's a little of that, from the boss of our biggest health insurere:

"What's more important though when I look through in the next few years is how do we keep pressure off premiums on an ongoing basis?

"We continue to advocate for more productivity in health and to make sure that we can preserve the quality health outcomes that we can currently enjoy in this country.

"More needs to be done on investing in prevention.

"Pleasingly and importantly we're very proud to invest half the industry's dollars on chronic disease management even though we have 27% share.

"More needs to be done on moving care into the home where consumers want care to be delivered and they have better outcomes.

"More needs to be done on digitising the health system. The health system is still one of the biggest users of fax machines.

"And more needs to be done to personalise care. That's what consumers want. That's what we're advocating for.

Watch The Business, Mondays to Thursdays 8:44pm on ABC News Channel, after the Late News on ABC TV, and anytime on ABC iView

By Daniel Ziffer

Bitcoin has surged 5% overnight, boosted by positive policy signals in the US.

On the back of that, cryptocurrency-related stocks rocketed too, a day after the US Treasury Department said it would support more long-duration bonds, boosting risk assets, and as US President Donald Trump urged Congress to pass legislation establishing clear rules for digital assets.

The Treasury's move to double buyback sizes for long-duration debt came after a major bond selloff pushed the 30-year Treasury yield to its highest level since 2007. Higher yields are typically a negative for risk assets like cryptocurrencies because they increase the returns on safer investments.

While the Treasury's intervention was relatively small and offered only short-lived relief for bonds, it nevertheless provided a positive signal for crypto, analysts said.

Here's a a research note from Alex Kuptsikevich, chief market analyst at brokerage FxPro:

"The rally (in crypto) was then fueled by a wave of short-covering, following weeks of extremely narrow trading."

Bitcoin was last up 3.48% at $71,505, having crossed the $70,000 mark for the first time since June.

The world's largest cryptocurrency has lost about 18% so far this year and remains down about 43% from its record high in October.

Investors may also have been encouraged by Trump's show of support for crypto legislation, the industry's top policy priority.

Trump, who promised on the campaign trail to make the United States the "crypto capital of the world" and who has profited from his own crypto ventures, on Wednesday called on lawmakers at a White House event with crypto executives to pass a "fair version of the Clarity Act," currently stalled in the Senate.

More, from US Tiger Securities analyst Bo Pei:

"Trump's comments (on Wednesday) are incrementally positive because they suggest the White House is putting more direct pressure on Congress to get the legislation done."

The Clarity Act, if enacted, would define whether cryptocurrency qualifies as a security or a commodity, clarifying jurisdiction between the Securities and Exchange Commission and the Commodity Futures Trading Commission over the sector.

Industry executives and analysts have said that without legislation, regulations are vulnerable to shifting political winds and court challenges.

However, many Democrats, and some Republicans, say they would not support a bill without strong language banning political officials, including Trump, from profiting from their own crypto ventures.

Trump disclosed more than $1.4 billion in earnings from his family's crypto ventures in 2025.

Ether gained 2.46% and was last trading at $2,272, its highest level in over three months.

- With Reuters

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