Shares in Asia have rallied and the Australian dollar has hit an eight-month high as optimism over earnings and trade supported demand for higher yielding assets.

Tokyo’s broad Topix gauge of shares hit an all-time high, following new records on Wall Street overnight, after a trade pact between Japan and the US stoked speculation more deals would appear soon to head off sweeping tariffs. Nasdaq and S&P futures rose after results by Google parent Alphabet beat estimates to kick off the “Magnificent Seven” earnings season.

The US has also reached deals with the Philippines and Indonesia and an agreement with the European Union is also expected.

“Worst case concerns about tariffs in the US are probably dissipating to some degree at the moment, but nonetheless, tariffs are going up and that is a hurdle for consumers,” Brian Martin, ANZ’s head of G3 economics, said in a podcast.

The EU and US are closing in a trade deal that would impose 15 per cent tariffs on European imports, while waiving duties on some items, according to officials from the European Commission. Meanwhile, Treasury Secretary Scott Bessent said US and Chinese officials will meet in Stockholm next week.

Second-quarter earnings season is underway in the US, with 23 per cent of the companies in the S&P 500 having reported. Of those, 85 per cent have beaten Wall Street expectations, according to LSEG data.

Results from Magnificent Seven members, whose results have powered indexes to previous peaks, are in the spotlight for guidance on spending and returns surrounding artificial intelligence.

Alphabet strongly beat estimates and cited massive demand for its cloud computing services as it hiked its capital spending plans. But electric car maker Tesla posted its worst quarterly sales decline in more than a decade and profit that trailed analyst targets.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.3 per cent. Japan’s Topix surged for a second day, rising 1.4 per cent to surpass its previous all-time high reached last year.

The Australian dollar, a common proxy for risk sentiment, fetched $0.66, just off $0.6604 hit earlier, which was the highest since November 2024. The US dollar dropped 0.1 per cent to 146.38 yen.

US crude climbed 0.4 per cent to $65.5 a barrel. Spot gold was traded at $3,390.84 per ounce, up 0.1 per cent.

In early trades, pan-region Euro Stoxx 50 futures shot up 1.3 per cent at 5,435, while German DAX futures were up 1.3 per cent.

US stock futures, the S&P 500 e-minis, were up 0.13 per cent and Nasdaq contracts climbed 0.4 per cent.

The fallout from Elon Musk’s plunge into politics is still hammering his Tesla business as both sales and profits dropped sharply again in the latest quarter.

The car company said revenue dropped 12 per cent and profits slumped 16 per cent in the three months through to June as buyers continued to stay away.

“The perception of Elon Musk, its chief executive, has rubbed the sheen right out of what once was a darling and soaring automotive brand,” wrote Forrester analyst Dipanjan Chatterjee in an email. Tesla is “a toxic brand that is inseparable from its leader.”

Quarterly profits at the electric vehicle, battery and robotics company fell to $1.17 billion, or 33 cents a share, from $1.4 billion, or 40 cents a share. That was the third quarter in a row that profit dropped. 

Revenue fell from $25.5 billion to $22.5 billion in the April through June period, slightly above Wall Street’s forecast. 

Tesla shares fell 3 per cent in after-hours trading. 

Musk spent the company’s earnings conference call talking less about car sales and more about robotaxis, automated driving software and robotics, which he says is the future of the company. But those businesses are yet to take off, and the gap between promise and profit was apparent in the second quarter.

As well as his role in the Trump administration, the Tesla chief alienated many potential buyers in Europe by embracing far-right candidates for office. Rival electric vehicle makers such as China’s BYD and German’s Volkswagen have pounced on the weakness, stealing market share. 

Tesla began a rollout of its paid pickup robotaxi service in Austin, Texas, and hopes to introduce the driverless cabs in several other cities soon. 

In the post-earnings call, Musk said the service will be available to probably “half of the population of the US by the end of the year — that’s at least our goal, subject to regulatory approvals.”

With autonomous taxis, though, the billionaire who upended the space race and EV manufacturing faces tough competition. The dominant provider now, Waymo, is already in several cities and recently logged its ten-millionth paid trip.

Meanwhile other threats loom. The new federal budget just passed by Congress eliminates a credit worth as much as $7,500 for buying an electric car. It also wipes out penalties for car makers on exceeding carbon emission standards. That threatens Tesla’s business of selling its “carbon credits” to traditional car companies that regularly fall short of emission standards.

“We’re in this weird transition period where we’ll lose a lot of incentives in the US,” Musk said, predicting several rough months ahead, possibly through June of next year. 

The company is  speeding up the introduction of a cheaper car to the market this year. 

In the robot business, Musk said he expects explosive growth as Tesla ramps up production of its humanoid Optimus helpers to 100,000 a month in five years.

“We’ll go from a world where robots are rare to where they’re so common that you don’t even look up,” he said.

Asked about whether he would want more than his current 13 per cent stake in Tesla to keep control, Musk said he did want more but not too much. 

“I think my control over Tesla should be enough to ensure that it goes in a good direction,” he said, “but not so much control that I can’t be thrown out if I go crazy.”

Australian cattle producers have been left blindsided by a decision to lift a ban on US beef, but the level of American product arriving in Australia is expected to be very low.

The federal government on Thursday revealed it would lift biosecurity restrictions on US beef as it seeks a way to dampen the blow of President Donald Trump’s volatile tariff regime.

Australia has been mulling over the move for months after Mr Trump requested a lift on the ban, and Agriculture Minister Julie Collins stressed the decision follows a decade-long science-based review.

Cattle Australia CEO Will Evans believed the move would not have been made unless the government had the utmost confidence in the science, but said some would still be unhappy with its decision.

“There’s going to be a lot of people today who feel blindsided by this, there’s going to be a lot of people who are going to feel really frustrated and threatened by this,” he told ABC radio.

“We need to talk to them.

“The US is an incredibly important trading partner – we need to maintain access and we need to maintain relationships with them.”

Some have raised worries US beef could impact Australia’s domestic market, industry representatives remain relatively unperturbed.

“It’s a bit like selling ice to Eskimos,” Australian Meat Industry Council CEO Tim Ryan told ABC.

The domestic beef industry is self-sufficient and any imports of US beef are “unlikely to have any effect on the market here”, Mr Evans said.

The US can’t even meet its own needs, he noted, and remains one of the main export markets for Australian beef.

Likewise, Australian beef is one of the country’s biggest exports to the US and was worth $14 billion in 2024.

But the US president has taken issue with the perceived one-sidedness of this relationship, saying in April, “they won’t take any of our beef”.

The US has been able to send beef to Australia since 2019, though any beef raised in Canada or Mexico before being slaughtered and processed in the US was previously barred due to biosecurity concerns.

One concern was that Mexico’s livestock tracking system could inadvertently lead producers to import beef from parts of the continent where there were disease outbreaks.

But the latest announcement will lift the ban on beef sourced from Canada or Mexico after the US introduced more robust movement controls in late 2024 and early 2025, allowing for improved identification and tracing throughout the supply chain.

“We have not compromised on biosecurity,” Ms Collins told reporters in Canberra.

“Australia stands for open and fair trade – our cattle industry has significantly benefited from this.

“(The department) is satisfied the strengthened control measures put in place by the US effectively manage biosecurity risks.”

The change is widely viewed as a bargaining chip Australia could use while attempting to push for tariff exemptions from the US.

Nationals Leader David Littleproud said he held concerns about its “swiftness”.

“It looks as though it’s been traded away to appease Donald Trump, and that’s what we don’t want,” he told ABC radio.

Opposition trade spokesman Kevin Hogan also said there are more questions to be answered and maintained the government needed to ensure biosecurity protocols had not been weakened.

Ms Collins insists the decision has been part of a years-long science-based process that precedes Mr Trump’s tariffs.

Many Australian goods sent to the US currently face the baseline 10 per cent tariff, while steel and aluminium products have been slapped with a 50 per cent tariff.

Mr Trump has also threatened a tariff on pharmaceutical imports to the US, which is one of Australia’s biggest exports to its ally.

Australia could become the subject of legal action after an international court said countries have an obligation to prevent climate change harm and redress damage caused by greenhouse gas emissions.

The non-binding advisory opinion was issued by a 15-judge panel at the International Court of Justice in The Hague in The Netherlands overnight.

It opens the way for countries to potentially sue each other over climate change impacts.

Social justice group ActionAid Australia, which lobbies for women’s rights, said the advice was a wake-up call for the Labor federal government.

“This ruling is a powerful tool we can use to demand that those most responsible for this climate crisis be held accountable,” the group’s Vanuatu country manager Flora Vano said on Thursday.

Ms Fino, who travelled to the Hague last year to deliver testimony as part of the court proceedings, said women and girls on the frontlines of the climate crisis will be able to fight for justice and accountability.

ActionAid Australia executive director Michelle Higelin said the ruling was clear.

“Australia must do all it can to keep global heating to 1.5 degrees,” she said.

“This is not a choice, this is an obligation to take stronger and more urgent action.”

ActionAid wants the government to “urgently” transition away from fossil fuels and increase funding to low-income countries, including those in the Pacific, to support climate adaptation efforts.

Global science and policy institute, Climate Analytics, which has an Australia-Pacific region office, said the court has pointed to potentially serious legal consequences.

Action could be taken under customary international law if countries don’t put forward climate targets aligned to the Paris Agreement to limit global warming to 1.5C above pre-industrial levels.

“Importantly, these obligations also apply to countries whether or not they are Parties to the Paris Agreement,” it added. 

Australia’s current commitment to the Paris Agreement includes reducing greenhouse gas emissions by 43 per cent below 2005 levels by 2030 and achieving net-zero emissions by 2050.

The world court’s opinion comes after Vanuatu University law students argued that the people of Pacific island countries are unjustly bearing the brunt of climate change compared to high-emitting economies.

“The degradation of the climate system and of other parts of the environment impairs the enjoyment of a range of rights protected by human rights law,” presiding judge Yuji Iwasawa said, reading out the court’s opinion.

The court decision “confirms that states’ obligations to protect human rights require taking measures to protect the climate system … including mitigation and adaptation measures,” judge Hilary Charlesworth, an Australian member of the court, said in a separate opinion. 

The 133-page opinion was in response to two questions the United Nations General Assembly put to the UN court.

The first was: what are countries obliged to do under international law to protect the climate and environment from human-caused greenhouse gas emissions?

The second was: regarding the legal consequences for governments when their acts, or lack of action, have significantly harmed the climate and environment?

A response is being sought from the federal government.

Vanuatu Minister for Climate Change Adaptation Ralph Regenvanu described the court’s opinion as a “very important course correction in this critically important time”.

“For the first time in history, the ICJ has spoken directly about the biggest threat facing humanity,” he said at The Hague.

Australia has opened the door to more US beef imports by lifting biosecurity restrictions, as the government seeks ways to dampen the blow from Donald Trump’s tariff regime.

The federal government revealed the changes on Thursday while stressing that the decision follows a decade-long science-based review.

“The Albanese Labor government will never compromise on biosecurity,” Agriculture Minister Julie Collins said.

“Australia stands for open and fair trade – our cattle industry has significantly benefited from this.

“(The department) is satisfied the strengthened control measures put in place by the US effectively manage biosecurity risks.”

Although the US has been able to send beef to Australia since 2019, any beef raised in Canada or Mexico before being slaughtered and processed in the US was previously barred due to biosecurity concerns.

One concern was that Mexico’s livestock tracking system could inadvertently lead producers to import beef from parts of the continent where there were disease outbreaks.

But the latest announcement will lift the ban on beef sourced from Canada or Mexico after the US introduced more robust movement controls in late 2024 and early 2025 allowing for improved identification and tracing throughout the supply chain.

The change could be used as a bargaining chip as Australia continues to push for tariff exemptions from the US after the US president earlier this year demanded Canberra lift the beef import restrictions.

Australia is the biggest exporter of beef to the US. 

According to Bendigo Bank’s recent mid-year agriculture outlook, Aussie beef will continue to be on the menu in the US, where herd numbers are in decline due to drought and increased costs of agricultural inputs.

Most Australian goods sent to the US currently face a 10 per cent tariff, while steel and aluminium products have been slapped with a 50 per cent tariff.

Mr Trump has also threatened a tariff on pharmaceutical imports to the US, which is one of Australia’s biggest exports to its ally.

Although Prime Minister Anthony Albanese is yet to secure a face-to-face meeting with Mr Trump – after their first scheduled talks were scuppered by the conflict in the Middle East – Australia has largely avoided the brunt of the tariffs as most of its exports are only exposed to the baseline levy.

But other aspects of the US-Australia relationship remain uncertain.

The nuclear submarine deal between Australia, the US and the UK – under the AUKUS security alliance – could be in peril after the Pentagon launched a review to examine whether the agreement aligns with Mr Trump’s “US first” agenda.

However, Mr Albanese has confirmed Australia made another scheduled payment as part of the deal to acquire US nuclear submarines, taking the total paid to $1.6 billion so far.

“It’s about increasing … their industrial capacity” to build the submarines, he told ABC television on Wednesday.

Under the $368 billion program, Australia will buy at least three Virginia-class submarines from the US sometime in the early 2030s.

A new class of nuclear submarines will be built in Adelaide to be delivered in the 2040s.

The European Union is heading towards a trade deal with the United States that will result in a broad 15 per cent tariff on EU goods imported into the US, avoiding a harsher 30 per cent levy slated to be implemented from August 1, two EU diplomats say.

The rate, which could also extend to cars, would mirror the framework agreement the United States struck with Japan.

Officials from the European Commission, which negotiates trade deals on behalf of the 27-member bloc, briefed EU envoys on the state of talks with their US counterparts. 

US President Donald Trump would ultimately make any final decision on a deal, however.

Under the outlines of the potential deal, the 15 per cent rate could apply to sectors including cars and pharmaceuticals and would not be added to long-standing US duties, which average just under five per cent.

There could also be concessions for sectors like aircraft, lumber as well as some medicines and agricultural products, which would not face tariffs, the diplomats said.

The US administration does not, however, appear willing to lower its current 50 per cent tariff on steel, they said.

The Commission said earlier on Wednesday that its primary focus was to achieve a negotiated outcome to avert the threatened 30 per cent tariffs.

At the same time it planned to submit counter-tariffs on 93 billion euros ($A166 billion) worth of US goods to EU members for approval. 

A vote is expected on Thursday although no measures would be imposed until August 7.

Germany supported the EU readying countermeasures, a government representative said.

If Trump’s 30 per cent tariffs are implemented, EU diplomats also said there was broad support among European governments to activate wide-ranging so-called “anti-coercion” measures, which would allow the bloc to target US services and other sectors.

The EU appears to be following in the footsteps of Japan, whose agreement with the United States is the most significant Trump has struck since launching his tariff offensive in April.

European shares climbed about one per cent, led by car stocks, following the US-Japan announcement.

One stand-out feature of that deal was that the same 15 per cent rate applies to cars, compared to the current US tariff of 27.5 per cent, something the EU may want for its own car exports.

The US imported vehicles and automotive parts valued at more than $US55 billion ($A84 billion) from Japan last year. 

EU exports were 47.3 billion euros.

Far fewer US cars were sold into the EU or Japanese markets.

EU officials say the US has shown little sign of budging on car tariffs but the Japan deal could hint at flexibility.

“Whatever the Japanese got will become the minimum for the EU negotiating objectives,” said Simon Evenett, professor of geopolitics and strategy at IMD Business School.

A push to raise the GST as part of the government’s economic roundtable is being met with resistance, with the community services sector warning it would increase the burden on low-income earners.

A number of prominent economists have advocated raising or broadening the 10 per cent GST to fund cuts to less-efficient levies such as income taxes.

Australian Council of Social Service chief executive Cassandra Goldie objects to the proposal on the grounds it would increase inequality.

“We need a fairer and more effective tax system that secures the revenue we need to fund essential services and safety nets while encouraging more productive investment to create jobs and lift living standards,” she said.

“This can be done with reforms that lift productivity and overall revenue without increasing the burden for people on low and modest incomes.”

While Prime Minister Anthony Albanese has said increasing the tax on consumption does not fit with his agenda, Labor is pledging to overhaul Australia’s tax system as part of an economic roundtable in August.

The summit is aimed at kick-starting the nation’s stalled productivity growth and living standards.

Shifting from income to consumption tax would ease the burden on younger working Australians but it would also widen wealth inequality, deepen poverty and deliver only modest economic efficiency gains, a report produced by the council found.

Broadly speaking, personal income tax is more progressive than the GST because people pay a higher rate the more they earn, whereas low-income earners tend to pay a higher proportion of their money on consumption taxes than people on higher incomes who save more.

Instead, the government should take steps that reduce inequality while lifting productivity and revenue, report author Peter Davidson found.

To that aim, they could tighten loopholes for family and corporate trusts, limit negative gearing, reduce tax concessions on superannuation and halve the 50 per cent discount on the capital gains tax.

Changing the capital gains tax discount has been backed in by the Greens and Labor-aligned think tank the McKell Institute, which argued it could be tweaked to encourage new housing supply and make it easier for Australians to own their own home.

Prospective homebuyers hoping for lower mortgage rates could get a clearer indication of the Reserve Bank’s next move on Thursday when governor Michele Bullock speaks for the first time since a surprise surge in unemployment last week.

Ms Bullock will talk about the RBA’s dual mandate of maintaining low inflation and unemployment in a speech to the Anika Foundation in Sydney.

Australia’s largest investment bank will be in activists’ sights when shareholders gather at its global headquarters for its annual general meeting.

Environmental group Market Forces plans to have a four-metre-tall mock gas flare outside Macquarie Group’s new Martin Place offices in Sydney on Thursday morning, representing the bank’s financing of climate pollution.

At the meeting Macquarie faces its first climate-focused shareholder resolution calling on the $86 billion company to outline how its financing for fossil fuel projects is aligned with its net-zero commitments.

Activists say they’re concerned about Macquarie’s commitment to global climate goals after the bank followed US peers JPMorgan, Citi and Bank of America in exiting the Net Zero Banking Alliance in February, not long after President Donald Trump took office.

Macquarie has more than doubled its financing for oil and gas in the past two years, Market Forces says.

“Macquarie’s reputation as a green financial institution is completely at odds with its investments in one of Australia’s biggest new gas developments,” said Market Forces policy analyst Morgan Pickett, referring to its financing of a $100 million gas fracking project in the Northern Territory’s Beetaloo Basin.

Macquarie in late 2024 provided the funding for two of the gas companies most active in the Basin, Beetaloo Energy Australia and Tamboran Resources.

Australia’s Department of Industry, Science and Resources says Beetaloo has the potential to rival the world’s best gas projects, and developing it could create thousands of jobs and drive significant economic growth in the territory.

Activists say moving ahead with another gas project is irresponsible as the planet tips further into a climate emergency.

“As a climate scientist, I’m appalled that Macquarie Group is claiming to be green yet is lending to companies blasting ahead with new gas projects adding to irreversible global warming,” Lesley Hughes, climate change scientist and emerita professor of biology, said in a statement provided by Market Forces.

Macquarie is recommending shareholders reject the climate resolution, which asks the bank to disclose its exposure to fossil fuel companies and detail its approach for funding them in light of its goal of net-zero emissions by 2050.

Macquarie says the science behind climate change is “clear and unequivocal” but it believes in “a managed, orderly and just transition”.

“This means supporting carbon-intensive industries and companies including those in the oil/gas, electricity, agriculture, mining, transport and waste sectors to decarbonise, while protecting the vital services and jobs that our communities rely on,” Macquarie said.

Market Forces says four global investors have backed the shareholder resolution: the pension funds of New York City, the UK’s Church of England and the largest private pension fund in Norway, as well as Melbourne-based fund manager ELM Responsible Investments.

A casual hospitality worker can expect to have weekend penalty rates of about $40 an hour protected under a bid to prevent take home pay for employees from being shaved.

Measures to enshrine penalty and overtime rates in law will be introduced in the House of Representatives on Thursday by Employment Minister Amanda Rishworth.

The bill aims to prevent variations to awards that would result in lower pay for workers.

It will be among the first pieces of legislation introduced by Labor in its second term of power following the May 3 federal election.

Workers can be entitled to higher rates of pay when they are required to work particular hours or days including weekends, public holidays or irregular hours.

While rates can vary depending on an employee’s specific award or agreement applicable to that industry, common pay rates for workers on a Sunday are double time (200 per cent) or time-and-a-half (150 per cent).

A calculation of rates on the Fair Work Commission’s website show for a casual hospitality worker, common penalties for a shift on Saturday to be $40.85 per hour, while a day’s work on Sunday could bring in $47.65 per hour.

Protecting penalty rates was an Albanese government election pledge.

Ms Rishworth said the bill will ensure the wages of about 2.6 million modern award-reliant workers are protected.

“If you rely on the modern award safety net and work weekends, public holidays, early mornings or late nights, you deserve to have your wages protected,” she said.

“Millions of hard-working Australians rely on penalty rates and overtime rates to keep their heads above water, which is why this bill is so critical and should receive the support of both the opposition and the Greens.”

Labor’s planned changes came after peak retail and business groups put forward proposals for large companies to opt out of providing penalty rates for staff in exchange for a raise on base levels of pay.

Opposition employment spokesman Tim Wilson said the coalition supported penalty rates.

“We will work through the legislation to make sure we consult the businesses and those it’s going to impact to get the best outcome,” he told AAP.

Mr Wilson said the absence of a regulatory impact statement, which lays out the potential impacts of the proposed changes, meant consultation was even more important to ensure it would be part of the future success of the economy.

The coalition also wants to assess how the changes would interact with the Fair Work Commission, which would be required to apply the new rules in addition to the modern awards objective in making its determination.

Students and graduates will soon receive a cut to higher education debts but advocates say the government must do more to make university fees fairer.

Legislation was introduced to parliament on Wednesday to slash HECS debts by 20 per cent and increase income thresholds before minimum repayments kick in.

It is expected to be passed with the support of the opposition in the coming weeks.

Prime Minister Anthony Albanese credited the bill as a key reason behind Labor’s victory in the May election.

“Because it resonated with those young Australians in particular, who are looking for intergenerational equity measures, which is what this is, saving some three million Australians an average of $5500 each,” he said during question time.

Federal Education Minister Jason Clare said the policy will make the system fairer.

“It means you start paying off your uni degree when uni starts to pay off for you,” he said while introducing the bill to the House of Representatives earlier on Wednesday.

People earning between $60,000 and $180,000 will save hundreds of dollars each year under the changes.

Someone on $70,000 will save the most on minimum repayments – $1300 a year –  due to an increase to the thresholds for when the debts must be paid.

The bill is set to sail through both houses of parliament, with Opposition Leader Sussan Ley telling Sky News: “We will be constructive where we can.”

Bruce Chapman, the architect of the HECS scheme, said the relief would make the system fairer by giving those on lower salaries more money in their pockets.

But the top priority should be reviewing the price of each degree because humanities students finish with the highest level of debt and end up being the lowest-paid graduates.

“All the prices are wrong,” Professor Chapman told AAP.

Mr Clare said further reforms were being looked at after the failure of the former Liberal government’s job-ready program.

The program aimed to fill skills shortages by making it cheaper to take courses such as teaching, nursing and psychology, while doubling the cost of popular degrees including law, communications, business, humanities and the arts.

“If the intention there was to reduce the number of people doing arts degrees, it hasn’t worked,” Mr Clare said.

“People study the courses they’re interested in, that they want to do, that they love.”

The universities’ accord final report branded the program “deeply unfair” because it punished students who followed their interests.

It recommended that fees reflect future earning potential as part of 47 recommendations to reform the sector.

The universities sector welcomed the HECS bill but called on the government to repeal the jobs-ready graduates scheme.

“Scrapping the job-ready graduates package to make student fees fairer and expanding the Commonwealth prac payment could help shift the dial on participation, which is what the country needs,” Universities Australia chief executive Luke Sheehy said.

Other aspects about how HECS debts were paid off also needed to be addressed, Prof Chapman said.

HECS repayments are taken from a person’s pay if they earn above an income threshold.

But the money isn’t immediately taken off the total debt and is instead deducted as a lump sum at the end of the financial year after indexation has been applied.

The university accord recommended the arrangement be changed to make the system fairer.

The Australian Tertiary Education Commission has been established in an interim capacity to implement long-term university reform and will review the HECS system over the next 12 months.

Mr Clare will introduce further legislation to make the commission a permanent body.