The dollar is heading for its first weekly fall in five weeks against major currencies and long-dated Treasury yields remain elevated as US debt concerns that have mounted for years start driving moves in currencies and global debt.

Investor attention has switched from tariff anxiety to US fiscal concerns in a week where Moody’s downgraded the US credit rating and the Republican-controlled House of Representatives on Thursday passed a sweeping tax and spending bill.

Futures contracts tracking Wall Street’s benchmark S&P 500 share index were steady in European trade on Friday morning as investors balanced the tax-cut boost to corporate earnings with longer-term concerns about the US economy.

“It’s good for corporates initially, and clearly you’re seeing the flip side of that in Treasury markets,” Netwealth CIO Iain Barnes said.

But with long-dated debt yields’ tendency to affect valuations of other assets, from global currencies to stocks, he said investors were nervous that any further volatility in 30-year Treasuries could start rippling across global markets.

With the US debt pile already at $US36 trillion, President Donald Trump’s plans to slash taxes, cut federal budgets and boost military and border enforcement spending has sparked rollercoaster moves in the long-term debt yields that set the nation’s borrowing costs.

The 30-year Treasury yield was four basis points lower but held just above five per cent after hitting a 19-month high in the previous session.

Yields on 30-year Japanese bonds, which hit record highs earlier in the week as selling driven by domestic fiscal and inflation concerns was exacerbated by moves in US debt, recovered slightly, declining by 5 bps to about 3.10 per cent.

Data on Friday showed Japan’s core consumer price inflation climbed 3.5 per cent in April in its steepest annual increase for more than two years, raising pressure on the Bank of Japan to keep hiking interest rates.

In the euro area, German Bund yields dipped on but stayed on track for their fifth straight weekly rise, tracking US Treasuries.

The benchmark European debt has sold off despite money markets showing that traders anticipate the European Central Bank cutting its main deposit rate to about 1.75 per cent by year-end.

In currency markets, the euro firmed 0.5 per cent to $1.1335 .

An index tracking the US currency against a basket of peers including the euro and Japan’s yen, was 0.2 per cent lower and down 1.3 per cent on the week in its first weekly drop since late April.

Despite the euro’s gain, which tends to knock exporters’ shares, Europe’s Stoxx 600 share index gained 0.3 per cent in early dealings and Germany’s Xetra Dax added 0.4 per cent, as traders stayed cautious towards US assets.

Japan’s Nikkei also gained 0.5 per cent on Friday, with MSCI’s broadest index of Asia-Pacific shares outside Japan rising by the same amount.

Bitcoin prices dipped from its record high but it was still set for a weekly gain of 6.4 per cent to $US110,796.

Oil prices dropped for a fourth consecutive session and were set for their first weekly decline in three weeks, weighed down by renewed supply pressure from another possible OPEC+ output hike in July.

Brent futures fell 0.85 per cent to $US63.89 a barrel and US West Texas Intermediate crude futures fell 0.9 per cent to $US60.65.

In precious metals, gold prices rose just more than one per cent to $US3,321 an ounce.

A trans-Atlantic consortium led by RedBird Capital Partners has struck a deal to buy Britain’s Telegraph newspaper, the title says, spending Stg500 million ($A1 billion) to secure control.

The ownership of the right-leaning broadsheet has been in flux after the Abu Dhabi-backed RedBird IMI bought the Telegraph titles and the Spectator magazine in 2023, before Britain’s then government moved to ban foreign state investment in British newspapers, forcing it to sell.

The Telegraph said on Friday the US private equity firm RedBird Capital, which provided a quarter of RedBird IMI’s funding, was moving to take direct control and was expected to be joined in the ownership group by British media investors.

The ownership of the Telegraph, one of Britain’s best known newspapers which strongly backed the country’s vote to leave the European Union, has raised questions about the independence of the media and foreign states buying political influence.

Britain’s previous Conservative government in 2024 banned foreign state investment in British newspapers, blocking RedBird IMI, run by former CNN boss Jeff Zucker and with the majority of its funding from Abu Dhabi, from owning the Telegraph.

However, the Labour government said earlier in May that it proposed to allow foreign state-owned investors to own up to 15 per cent of British newspaper publishers.

The Telegraph said no final agreements were in place and regulatory hurdles would loom.

“We believe the UK is a great place to invest, and this acquisition is an important part of RedBird’s growing portfolio of media and entertainment companies in the UK,” Gerry Cardinale, the founder of the US private equity firm, was quoted by the newspaper as saying.

The German economy grew significantly more in the first quarter than previously estimated due to good economic developments in March, according to a second estimate.

The economy grew by 0.4 per cent in the first quarter of 2025 compared with the previous quarter, the statistics office said on Friday, revising a preliminary reading of 0.2 per cent.

Germany’s sluggish economy has not grown at that pace since the third quarter of 2022, when it expanded by 0.6 per cent.

Economic growth was driven by trade and consumption.

Manufacturing output and exports registered stronger growth than initially assumed in March, said Ruth Brand, president of the statistics office.

Exports rose by 3.2 per cent compared with the previous quarter, as US importers brought their purchases forward in anticipation of tariffs.

Household consumption saw stronger growth than in the preceding quarters, rising by 0.5 per cent.

By contrast, government spending declined by 0.3 per cent in the first quarter compared with the previous one. 

According to the statistics office, this is due to the provisional budget.

Germany had contracted in the final quarter of 2024 by 0.2 per cent, reigniting recession fears. 

A recession is defined as two consecutive quarters of negative growth.

Germany had also been expected to be badly affected by tariffs due to its export-oriented economy. 

The US was Germany’s biggest trading partner in 2024 with two-way goods trade totalling 253 billion euros ($A445 billion).

After former chancellor Olaf Scholz’s coalition collapsed in November, the last government ran out of time to pass the 2025 budget. 

Germany has instead been operating on a provisional budget since the start of the year.

Germany’s new finance minister has begun intensive preparations for the 2025 and 2026 budgets.

The final make-up of Australia’s next federal parliament will soon be known, as counting nears its conclusion in two tight election races.

Independent candidate Nicolette Boele is ahead of Liberal Gisele Kapterian by just three votes in the Sydney seat of Bradfield.

Ms Boele was provisionally declared the winner in the electorate by 39 votes on Monday, but the gap has narrowed even further after a final distribution of preferences.

An Australian Electoral Commission spokesman said the distribution would be completed by Friday.

If there are still fewer than 100 votes separating the candidates, a formal recount will be conducted in the seat.

Ms Kapterian was originally declared the winner in Bradfield by some media outlets, and was in the Liberal party room during the leadership contest that led to Sussan Ley be named opposition leader.

However, a strong spread of postal and absentee votes to the teal independent caused her to take a narrow lead in the Liberal stronghold.

Labor is on track to pick up an extra seat to add to its increased majority as counting continues in the Melbourne-based seat of Calwell.

The electoral commission said the count was the most complex in its history, due to the number of candidates contesting and primary votes being close between them.

As the full preference distribution is carried out, it has come down to a four-way contest between Labor, the Liberals, the Greens and an independent.

The final two candidates are expected to be Labor’s Basem Abdo and independent Carly Moore.

Labor is expected to win the seat if it receives slightly more than one-third of the votes against the independent.

An electoral commission spokesman said counting would resume on Monday.

A win in Calwell will place the government on 94 seats in the 150-seat House of Representatives.

The Liberals have 28 seats in the lower house and the Nationals have 15.

The Greens have been reduced to one seat, with 11 shared between independents and other minor parties.

Parliament is set to return on July 22.

An in-principle agreement to four key policies has paved the way for an estranged coalition to come back together after their political marriage split.

The Liberal party room met virtually on Friday, ticking off the demands the Nationals had made before breaking up their political arrangement for the first time in nearly 40 years.

The policies were removing a federal moratorium on nuclear energy, boosting rural phone connectivity, divestiture powers to keep big supermarkets in check and keeping a regional investment fund.

There have been reservations about the policies, including from Liberal free-marketeers who argue divestiture powers represent too much government intervention.

Policy details will still be the subject of negotiations given the Liberals only agreed to in-principle support.

There was a broad consensus a united opposition was more important than infighting, despite anger at how the Nationals acted when they tore apart the coalition on Tuesday.

The regional party insists it was a policy-driven split and not a power play.

“No matter how they want to dress it up, when our people in the regions are suffering way more than the people in the cities, a few polices that would help them being left on the table isn’t a big ask,” Nationals senator Ross Cadell told AAP.

Liberal leader Sussan Ley and Nationals leader David Littleproud will now need to bury the hatchet to form a shadow cabinet, which is made up on a proportional basis of MPs from both sides.

The portfolio division is negotiated by the leaders, who then choose their respective representatives.

Finer details of a coalition agreement will also need to be hammered out.

There’s no love lost between the two leaders, going back to frequent clashes when Ms Ley was environment minister and Mr Littleproud was agriculture minister.

Mr Littleproud’s handling of the saga has led to rumblings about his leadership, but Nationals sources insist only a small cabal is agitating against him.

Asked if Mr Littleproud had his full support, former Nationals leader Michael McCormack on Friday replied: “I’m ambitious for him.”

It was the same comment former prime minister Scott Morrison used before he replaced Malcolm Turnbull as Liberal leader in 2018.

“He’s been really messy and for people on the outside looking in, they just wonder what the hell is going on,” Mr McCormack told the ABC.

Mr McCormack’s comments came after Mr Littleproud relegated him from a shadow ministry to the backbench when he tentatively drew up portfolio allocations for Nationals MPs during the short-lived divorce.

Nationals MP Darren Chester acknowledged the frustration in party politics taking centre stage as several regional communities experienced devastating flooding and loss of life.

Deputy leader Kevin Hogan said while the decision to split wasn’t unanimous, it was a “very conclusive decision” by the Nationals party room.

At least five people had expressed reservations about the split.

Ms Ley has also faced internal criticism over how the break-up was handled as a Liberal party room meeting wasn’t convened to discuss the Nationals policy demands until after the junior partner left the coalition.

New Zealand has slashed foreign aid to its lowest level in four years, with specific cuts to climate finance, in a move decried by the international development sector as a broken promise.

Finance Minister Nicola Willis unveiled the coalition’s second budget on Thursday, with a headline deficit of $NZ14.7 billion ($A13.5 billion).

Budget documents show official development assistance (ODA) spending dropping from $NZ1.1 billion last year to $NZ999 million this year, its lowest level since 2021.

These figures do not include a drop in the cost of managing ODA, also cut by seven per cent from $NZ100 million to $NZ92.7 million.

In parliament, Ms Willis said the $NZ100 million cut was in the area of climate finance – which is aid given to developing nations to help them adapt or mitigate to the threat of global warming.

Budget papers show the government replacing a previous $NZ200 million annual commitment with a $NZ100 million budget line, but with no guarantees it will be spend on climate finance.

“The new funding will be used for (aid) projects with a priority focus on the Pacific. It will not be exclusively focused on meeting climate finance objectives,” the budget states.

Terence Wood, ANU-based development fellow, called the new budget a “grim tale”.

“When inflation is taken into account, by 2026/27 New Zealand aid will have fallen to 2019 levels, and it will have done so over a period where – thanks to climate change, illness and war – the need for aid has been rising fast,” he wrote.

According to World Vision, New Zealand’s aid is now 0.24 per cent of gross national income, well short of the UN-backed goal of 0.7 per cent.

World Vision New Zealand director Grant Bayldon said the cut in climate finance amounted to New Zealand “turning its back on the Pacific region”.

“New Zealand made a clear commitment under the Paris Agreement to support people in the world’s most vulnerable countries to adapt to climate change,” he said.

“Many of them are our Pacific neighbours, where children are already facing the devastating impact of climate change. We promised to stand with them – now we’re pulling back.”

Nick Henry, Oxfam Aotearoa’s climate justice lead, said the cuts came after New Zealand made commitments to triple climate financing by 2030 at the UN’s climate summit last year.

“This is really hard to understand as anything other than a breaking of that promise and a betrayal of our Pacific neighbours,” he told NZ website Newsroom.

Ms Willis told parliament Foreign Affairs Minister Winston Peters argued for more aid.

“Members will not be surprised to know that the Minister of Foreign Affairs has made a case for more funding, and this will be looked at in future budgets,” she told parliament in her budget speech.

The tough budgetary treatment for the Ministry of Foreign Affairs and Trade (MFAT) stands in contrast to the coalition’s first budget.

In 2024, Mr Peters was able to spare MFAT from cuts averaging seven per cent to most agencies, instead given a one per cent reduction.

Mr Peters – who was in Adelaide on Friday for the six-monthly dialogue with Australia’s foreign minister – did not respond to a request for comment.

In its most recent budget, Australia increased foreign aid in real terms, but the amount also fell to 0.18 per cent of GNI.

Pressure is mounting on David Littleproud’s leadership of the Nationals as questions mount over the party’s split from the Liberals.

A senior Nationals MP has failed to declare his confidence in Mr Littleproud while negotiations continue between the parties to patch up their differences.

Former deputy prime minister Michael McCormack confirmed he had spoken with Opposition Leader Sussan Ley as the two parties try to mend the coalition.

Asked if Mr Littleproud had his full support, Mr McCormack replied: “I’m ambitious for him.”

It was the same comment former prime minister Scott Morrison used before he replaced Malcolm Turnbull as Liberal party leader in 2018.

“He’s been messy. He’s been really messy and for people on the outside looking in, they just wonder what the hell is going on,” Mr McCormack told the ABC.

The former Nationals leader said he wanted to see a reconciliation with the Liberals.

“Sussan and I are very close and we speak together very regularly,” Mr McCormack said.

“The Nationals walked away from the Liberals and Sussan was the newly anointed Liberal leader.

“It’s important that I did talk to her to try and get things patched up.”

Nationals MP Darren Chester acknowledged the frustration in party politics taking centre stage as several regional communities experienced devastating flooding and loss of life.

Deputy leader Kevin Hogan said while the decision to split wasn’t unanimous, it was a “very conclusive decision” by the party room.

The Liberals will meet virtually for a second time on Friday afternoon to discuss the four policy demands made by the Nationals.

Liberal MP Dan Tehan, who has been working to fix an outcome, said the parties needed to work collectively and pool resources to hold the government to account, given their diminished ranks.

“You need an effective opposition,” he told ABC Radio.

The disputed policies include nuclear energy, divestiture powers against supermarkets, boosting phone connectivity in the bush, and a regional investment fund.

The Nationals have flagged they would accept a promise from the Liberals to back the removal of a moratorium on nuclear power, rather than double down on the coalition’s previous policy to build seven power plants.

But a rift has also emerged on climate policy after Mr Littleproud left the door open to dumping a commitment to net-zero emissions by 2050, following a challenge to his leadership over the target.

At a press conference at Parliament House on Thursday, Mr Littleproud said both leaders agreed to hold off announcing shadow cabinets and portfolio allocations in the hopes of a reunion.

MPs are confident an agreement can be reached out of sheer need, given the demolition of the Liberal Party in Labor’s landslide election win.

The Nationals pulled out of the decades-long coalition arrangement after Mr Littleproud said he failed to get Ms Ley to recommit to the key policies they took to the election.

Ms Ley didn’t outright reject the policies during initial talks, but said she couldn’t commit to anything so soon after the election defeat as the party room had to review the loss.

Asian shares made some tentative gains on Friday as beaten-down Treasuries found buyers after US President Donald Trump’s tax bill narrowly passed the lower house, although debt worries still lingered.

Overnight, PMI data around the globe showed US business activity picked up pace in May, which helped Wall Street rise earlier in the session before running into selling pressures and closing the day largely flat. In contrast, disappointingly weak activity in Europe dragged shares there lower.

Nasdaq futures and S&P 500 futures both were flat.

The Republican-controlled US House voted by a slim margin to pass Trump’s tax cut bill, which would fulfil many of his campaign pledges, but will increase the $US36.2 trillion ($A56.4 trillion) US debt pile by $US3.8 trillion ($A5.9 trillion) over the next decade.

Treasury yields, especially at the longer-dated end, have climbed on worries about US fiscal health in the run-up to the passage of the bill. That was exacerbated by the decision from Moody’s last week to downgrade the US credit rating, citing rising debt.

The 30-year bonds, however, did manage to find some buyers overnight with prices now at some attractive levels. Their yields fell another one basis point to 5.037 per cent on Friday, having dropped four bps to pull away from a 19-month top of 5.161 per cent earlier in the session.

“Maybe the certainty of getting something through has been enough to alleviate some of the fear, panic in the market, but as well as that, it is not unusual in big moves for there to be a bit of overshoot,” said Ken Crompton, senior interest rate strategist at the National Australia Bank.

“There is certainly nothing in this market move or the passage of this version of the bill that tells me there is going to be meaningful reductions in US bond issuance or this broader concern about global bond supply.”

In Asia, yields on super-long Japanese government bonds (JGBs) held near all-time highs on Friday. The 30-year yields have jumped 23 basis points this week and were last at 3.175 per cent, which is being monitored closely by the Bank of Japan.

The MSCI’s broadest index of Asia-Pacific shares outside Japan inched up 0.1 per cent on Friday but for the week it is still set for a loss of 0.4 per cent after five weeks of gains.

Chinese blue chips and Hong Kong’s Hang Seng were largely flat.

Japan’s Nikkei rose 1.0 per cent as data showed Japan’s core inflation accelerated at its fastest annual pace in more than two years in April.

In the currency market, the dollar was on the back foot again and is headed for a weekly drop of 1.2 per cent against its major peers. The euro is set for the first weekly rise after four weeks of declines, and was up 0.2 per cent on Friday at $US1.1302 ($A1.7615).

US Federal Reserve Governor Christopher Waller said on Thursday he still sees a path to rate cuts later this year, but noted that the outlook depends on where Trump’s tariff policy settles.

Bitcoin is set for a weekly gain of 7.0 per cent at $US111,524 ($A173,814), having touched a record high of $US111,965 ($A174,501) just on Thursday.

Oil prices fell for a fourth straight session on the prospects of further output increases by OPEC+ countries. US crude futures dropped 0.7 per cent to $US60.76 ($A94.70) a barrel and were down 2.7 per cent for the week.

Brent fell 0.6 per cent at $US64.03 ($A99.79) per barrel.

In precious metals, gold prices were flat at $US3,292 ($A5,131) an ounce, but were set for a weekly gain of 2.8 per cent.

The Liberal Party is expected to accept four policy demands made by the Nationals as a condition for the coalition getting back together.

Liberal leader Sussan Ley addressed her party room during a virtual hook up on Thursday evening, with MPs agreeing on broad support for remaining in the political marriage following the shock split.

The demands made by the Nationals are expected to be further discussed by Liberal MPs in another meeting next week.

They include a commitment to nuclear energy, divestiture powers against supermarkets, boosting phone connectivity in the bush, and a regional investment fund.

Deputy Nationals leader Kevin Hogan said he expected the Liberals to accept their terms.

“They’re saying that they now will, and those type of policies are really important to us,” he told Nine’s Today on Friday.

“Some of those policies took us five years to negotiate and get through the Coalition party room process, and we don’t want to lose them. 

“Otherwise they may never come back onto the policy agenda again.”

At a press conference at Parliament House on Thursday, Nationals leader David Littleproud said both leaders had agreed to hold off announcing their shadow cabinets and portfolio allocations in the hopes of a reunion.

The Nationals have flagged they would accept a commitment from the Liberals to removing the moratorium on nuclear power, rather than doubling down on the previous policy to build seven power plants.

There’s confidence an agreement can be reached, given the chaos an alternative could lead to after Labor’s landslide election win.

The Nationals pulled out of the decades-long coalition arrangement after Mr Littleproud said he failed to get Ms Ley to recommit to key policies they took to the election.

Ms Ley didn’t outright reject the policies during initial talks, but said she couldn’t commit to anything so soon after the election defeat as the party room had to review its policies.

Nationals Senator Bridget McKenzie said the convention after an election was the platform taken to a poll remained the same until explicitly removed.

“The Liberal Party changed that modus operandi,” she told Sky News.

Members on both sides of the aisle have questioned why an agreement needed to be rushed only weeks after an overwhelming election loss.

The US Mint has made its final order of penny blanks and plans to stop producing the coin when those run out, a Treasury Department official says.

An immediate annual savings of $US56 million ($A87 million) in reduced material costs is expected by stopping penny production, according to the official who was not authorised to discuss the matter publicly and spoke on condition of anonymity to preview the news. 

In February, US President Donald Trump announced that he had ordered his administration to cease production of the one cent coin.

Trump posted on his Truth Social site then: “For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful!” 

He said he had instructed his Treasury secretary to stop their production.

The secretary has the authority to mint and issue coins “in amounts the secretary decides are necessary to meet the needs of the United States”.

Advocates for ditching the penny cite its high production cost – almost four cents per penny now, according to the US Mint – and limited utility. 

Fans of the penny cite its usefulness in charity drives and relative bargain in production costs compared with the nickel, which costs almost 14 cents to mint.

Pennies are the most popular coin made by the US Mint, which reported making 3.2 billion of them last year – more than half of all the new coins it made last year.

Congress, which dictates currency specifications such as the size and metal content of coins, could make Trump’s order permanent through law. 

But past congressional efforts to ditch the penny have failed.