The Australian summer is undergoing a “total transformation” as scientists warn climate change made a recent blistering heatwave five times more likely.

Australia’s southern states sweltered during early-January through the worst heatwave conditions since the summer of 2019-2020, a period scarred by devastating bushfires.

Peak temperatures in the 40s across much of southeast Australia constitute the sort of extreme event that would have occurred just four times a century before human-induced global warming.

Now, the World Weather Attribution says similarly intense three-day heatwaves can be anticipated every five years.

If the world warms 2.6C above pre-industrial averages as predicted under existing policy settings, such extreme heat events could strike every second year by the end of the century.

Australian National University professor of climate science Sarah Perkins-Kirkpatrick said the major shift in heatwave prevalence underlined the urgency to cut emissions and adapt to warming already baked in.

“It is a total transformation of the Australian summer,” Dr Perkins-Kirkpatrick said.

“What we once considered an extraordinary heat event is now something a primary school student today will likely experience several times before they finish high school.”

Health resources were stretched during the early-January heatwave as temperatures above 40C were recorded in the southern states on multiple days, with one hospital reporting a 25 per cent bump in emergency admissions. 

Victoria was hit hard, with Melbourne Airport recording a maximum temperature of 44C and a state of disaster declared when strong winds fanned several out-of-control fires across landscapes left bone-dry after days of severe heat. 

One life was lost to the fires that also burnt more than 900 structures and killed tens of thousands of sheep and cattle.

Ben Clarke, a Centre for Environmental Policy researcher at Imperial College London, said extreme heatwaves were on track to become the “norm rather than the exception” in Australia.

“One of our most striking findings is that the impact of climate change far outweighed natural climate variability – including a weak La Nina, which typically signals cooler temperatures,” he said.

Australia’s weather is heavily influenced year-to-year by the natural cycle known as the El Nino-Southern Oscillation.

A La Nina is associated with wetter conditions and lower daytime temperatures and an El Nino with drier conditions and higher maximums during the day.

Extreme heat is known as a “silent killer” that causes more deaths than floods, bushfires, cyclones, and storms combined in Australia.

Australia’s own national climate risk assessment suggests heatwave deaths could skyrocket by more than 400 per cent in Sydney and more than 250 per cent in Melbourne under 3C of warming.

Researchers are increasingly linking high temperatures to a range of worse health outcomes, including mental health concerns and more common and severe sleep apnea.

Emmanuel Raju, director of the Copenhagen Centre for Disaster Research at the University of Copenhagen, said the burden of extreme heat fell heaviest on the most vulnerable.

“The elderly, those in poor-quality housing or without cooling, and people with pre-existing health conditions,” he said.

“We urgently need to adapt our cities and our health systems to this new reality.”

Reserve Bank governor Michele Bullock and the members of her interest-rate-setting board are set to be glued to the Australian Bureau of Statistics website.

The focus of their fixation on Wednesday will ultimately boil down to a single number: the trimmed mean inflation figure for the December quarter.

Traders are putting their money on a Reserve Bank rate hike at its next meeting after a shock labour force report raised fears the jobs market shows no signs of softening and will contribute to inflation staying above the central bank’s two to three per cent target band.

December’s surprise fall in the unemployment rate to 4.1 per cent and stronger-than-expected employment growth of 65,200, reported by the statistics bureau on Thursday, made a rate hike on February 3 more likely at the margin, ANZ economists Adam Boyton and Aaron Luk said.

But the inflation figures are still the main factor for the Reserve Bank, particularly the trimmed mean, which strips out volatile items such as electricity costs to provide an underlying measure of inflation.

A trimmed mean of 0.8 per cent or less for the December quarter would likely result in a Reserve Bank hold, Mr Boyton and Mr Luk said.

But a figure of 0.9 per cent or more would likely put borrowers on track for more mortgage pain, depending on the detail of the print.

NAB senior economist Taylor Nugent predicts a trimmed mean of 0.9 per cent, driven by higher new car prices and a strong seasonal rise in travel prices.

The most hawkish of the big banks, NAB expects rate hikes in February and May as a result.

But there are still reasons for the doves to remain hopeful.

AMP economists Diana Mousina and My Bui said the large, one-off spike in employment growth compared to the gradual softening in growth during most of 2025 suggested “some unreliability” in Thursday’s jobs data.

The outsized jump in 15 to 24-year-olds moving into employment also suggested seasonality around Christmas hiring could be at play, which could result in some payback the following month.

Forward indicators such as falling job vacancies and job ads, as well as a predicted slowdown in growth of health care, education and government-related jobs, should take some steam out of the labour market in 2026, Ms Mousina and Ms Bui said.

They maintained their view the recent resurgence in inflation was only temporary and the Reserve Bank would keep rates on hold this year, but acknowledged the risk of a rate hike in February was high.

That view is becoming increasingly unpopular among market economists and bond traders.

Money markets are now pricing a 60 per cent chance of a February rate hike, with almost two hikes priced in before the end of the year.

Following the labour force print, the Aussie dollar jumped to trade above US68c for the first time since October 2024.

Meanwhile, banks have already begun hiking interest rates in anticipation.

Commonwealth Bank and Macquarie hiked fixed home loan rates by up to 0.7 percentage points earlier in January.

“The fixed rate tide is on the way out, but there’s still a smattering of lenders still offering rates under five per cent,” Canstar data insights director Sally Tindall said.

“How long they’ll hold on is a different question.”

Firebrand conservative senator Jacinta Nampijinpa Price has stoked the flames of leadership speculation after Liberals and Nationals broke up for the second time since the federal election.

After dumping the near-century-old political alliance, Nationals leader David Littleproud declared on Wednesday his party would not reunite with the Liberals while Sussan Ley remained opposition leader.

“Our party room has made it very clear that we cannot be part of a shadow ministry under Sussan Ley,” he told reporters in Brisbane.

Insiders from both parties believe this split will last much longer than the previous week-long split following Labor’s landslide election victory in May 2025.

Senator Price, who moved from the Nationals party room to the Liberals after the election, has previously said she does not have confidence in Ms Ley’s leadership.

“I think I made it very clear that obviously the leader had lost trust in me, lost faith in me, and I suppose I felt the same at the time,” she told Sky News on Thursday night.

“I don’t feel like things have improved … this is a decision for the partyroom ultimately,” Senator Price said.

Liberals are preparing for a challenge to Ms Ley’s leadership, likely when parliament returns in February, although exact details on the timing have not been locked in.

Conservatives Angus Taylor and Andrew Hastie are seen as Ms Ley’s most likely successors.

But one Liberal source described Mr Hastie as “One Nation-lite”, warning his brand of fiery conservative politics would do little to win over new voters.

Mr Taylor also carries baggage from his time as shadow treasurer, with some Liberals claiming he did not do enough to develop economic policy in the lead-up to the election.

Rumours of a possible challenge to Mr Littleproud are also swirling.

Former Nationals frontbencher Susan McDonald insisted Mr Littleproud’s position was safe at the moment, and said she hoped the coalition partners could rejoin forces quickly.

But she warned the reunion would not happen straight away.

“I’m very optimistic that the coalition will get back together at some point, because we know that united, we are stronger,” she told AAP.

“However, at the moment, circumstances are that I think that is unlikely in the near term.”

On Wednesday night, the entire Nationals frontbench tendered their resignations, breaking up the coalition for the second time since the last federal election.

Mr Littleproud said he was preparing a new frontbench made up of only Nationals members – a sign the split might last for some time.

A month after laying to rest many members of his congregation, a rabbi who has the ear of the prime minister hopes the country can begin to heal.

Rabbi Yehoram Ulman of Chabad Bondi, who lost his son-in-law Rabbi Eli Schlanger and many members of his community in the Bondi mass shooting, described the multiple losses as heart-breaking.

“For me personally, it was the most difficult time in my life that I’ve had,” he told reporters.

“I’ve lost friends. I’ve lost a dear son-in-law. I’ve seen members of my community losing parents, spouses. I’ve seen parents losing a child and it is devastating.”

Thursday marked a national day of mourning for those killed in the attack on December 14 when two gunmen shot 15 people, including 10-year-old Matilda, celebrating Hanukkah at Australia’s most famous beach.

At the forecourt of the Sydney Opera House, Rabbi Ulman delivered a rousing message of defiance amid a heavy police presence with helicopter patrolling the harbour and a sniper planted on the roof.

“We are reclaiming this Australian icon, which became a venue for darkness, a venue for hate, a venue for promoting violence,” he said.

The rabbi also referred to protesters who lit flares, burned Israeli flags and shouted anti-Semitic remarks on the Opera House steps after the attack by Hamas on Israel in 2023.

“Today we’re coming with the opposite message and that’s what really should be because Australian people deserve better,” Rabbi Ulman said.

At the memorial service, Prime Minister Anthony Albanese delivered a heartfelt apology which was acknowledged with a massive round of applause as he hugged the rabbi.

NSW Premier Chris Minns also drew huge cheers as he warned “Australia is not the country for you” for detractors of its freedoms.

He also paid tribute to Syrian-Australian Ahmed al-Ahmed who confronted one of the shooters and stripped him of his rifle, as thousands gave the tobacconist a standing ovation for his valiant efforts.

In an impromptu moment on stage, 14-year-old survivor Chaya Dadon who saved several children from the bullets said “the nation has stood up” by embracing Jewish-Australians in the weeks since the attack.

Rabbi Ulman also touched upon Judaic teachings to emphasise the community would refuse to mute their cultural and religious identities amid lingering pain.

“I hope that Australia is moving in the right direction but we can’t live in fear.”

The day of mourning marked the first such occasion in Australia since the death of Queen Elizabeth II in 2022.

Asian shares have mostly advanced, tracking Wall Street, after US President Donald Trump walked back from imposing tariffs on eight European countries over Greenland and ruled out using military force to take control of the territory.

The future for the S&P 500 gained less than 0.1 per cent and that for the Dow Jones Industrial Average was virtually flat on Thursday.

Tokyo’s Nikkei 225 climbed 1.7 per cent to 53,688.89, with technology stocks leading gains. SoftBank Group jumped 11.6 per cent and equipment maker Disco Corp. soared 17.1 per cent.

Advantest, which makes testing equipment for computer chips, surged 5%.

South Korea’s Kospi closed 0.9 per cent higher at 4,952.44 after crossing the 5,000 mark for the first time, as traders cheered.

Technology-related stocks drove the rally. Shares of chipmaker SK Hynix picked up 2 two per cent while Samsung Electronics rose 1.9 per cent.

Hong Kong’s Hang Seng edged less than 0.1 per ent higher to 26,600.68. The Shanghai Composite index edged 0.1 per cent higher to 4,122.58.

In Australia, the S&P/ASX 200 gained nearly 0.8 per cent to 8,848.70, Taiwan’s Taiex rose 1.6 per cent and India’s Sensex added 0.2 per cent .

US markets logged t heir biggest losses since October on Tuesday as investors reacted to Trump’s threat over the weekend to slap tariffs of 10 per cent on Denmark, Norway, Sweden, Germany, France, the United Kingdom, the Netherlands and Finland for opposing US control of Greenland, sparking concerns over worsening relationships between the US and its European allies.

But Trump, attending the World Economic Forum in Davos, Switzerland, backed down on Wednesday and said he would not use force to acquire Greenland.

The US president also said in a post on his social media site that he had agreed with the head of NATO on a “framework of a future deal” on Greenland and on Arctic security.

The easing tensions drove Wall Street optimism. On Wednesday, the S&P 500 climbed 1.2 per cent to 6,875. The Dow Jones Industrial Average gained 1.2 per cent to 49,077.23, while the Nasdaq composite also rose 1.2 oer cebt to 23,224.82.

Halliburton, the oil field services company, jumped 4.1 per cent following stronger-than-expected profits for the latest quarter. United Airlines rose 2.2 per cent also after better-than-expected quarterly profits. Netflix fell 2.2 per cent even as it reported a stronger profit than expected, as investors focused on factors including a slowing growth of subscribers.

The price of gold fell 0.2 per cent to $US4,828.70 per ounce, reflecting investors’ reduced worries, after passing the $4,800 mark ahead of Trump’s reversal of stance on Greenland as many flocked to safe-haven assets.

In the bond market, US Treasury yields also eased following lessened fear among investors as well as a calming of Japan’s bond market turmoil. The yield on the 10-year Treasury eased to 4.25 per cent from 4.30 per cent late Tuesday.

The U.S. dollar rose to 158.75 Japanese yen from 158.27 yen, prompting analysts to speculate that authorities might intervene if the yen falls any further.

The euro rose to $1.1692 from $1.1687.

US benchmark crude oil shed 16 cents to $60.46 per barrel. Brent crude, the international standard, fell 24 cents to $65.00 per barrel.

US Supreme Court justices have raised issues with President Donald Trump’s bid to fire Federal Reserve Governor Lisa Cook, seeming to embrace the idea that the central bank’s independence must be preserved.

In arguments on Wednesday, the justices suggested that agreeing with Trump’s stand would leave the door open too wide for presidents – now or in the future – to remove monetary policymakers and in doing so disrupt more ​than a century of letting central bankers make judgments about interest rates free of political pressure.

That concern was summarised most directly by conservative Justice Brett Kavanaugh during an exchange with Solicitor General D. John Sauer who has been tasked with arguing why Trump should be allowed to remove Cook ⁠over alleged misstatements made on mortgage applications before she was appointed to the Fed.

“Your position that there’s no judicial review, no process required, no remedy available, a very low bar for cause that the president alone determines – I mean, that would weaken, if not shatter, the independence of the Federal Reserve,” Kavanaugh said.

“We have to be aware of what we’re doing and the consequences of your position for the structure of the government.”

Making the removal of a Fed governor too easy gives the president an incentive for a search-and-destroy mission to “find something and just put that on a piece of paper – no judicial review, no process, nothing. You’re done,” Kavanaugh said.

Looming over the case are Trump’s persistent demands that the Fed cut interest rates faster and further than current Chair Jerome Powell has been willing to do in the face of lingering inflation. 

Trump has stated that he plans to install a like-minded new Fed chair when Powell’s term expires in May.

Trump cited the unproven allegations of mortgage fraud as justification for firing Cook, who was appointed as a Fed governor in 2022 by Democratic former President Joe Biden with a term running until 2038. 

Cook has called this allegation a pretext to oust her over monetary policy differences.

Economists regard it as a well-established principle that central banks that operate free from short-term political pressure make decisions producing better long-term economic outcomes, tempering inflation even if ‍it means high interest rates that can slow economic growth, raise unemployment and make life uncomfortable for politicians seeking re-election.

The judge who blocked Trump from immediately firing Cook said that the president’s  action without notice or a hearing likely violated her right to due process under the US Constitution’s Fifth Amendment. 

The Supreme Court is considering the Trump administration’s request to lift that judge’s order while Cook’s legal challenge to the president’s action continues to play out.

A Supreme Court ruling is expected by the ​end of June but could come sooner.

Santos has loaded its first LNG cargo at its Barossa project as it reports stronger production and revenue results despite weaker commodity prices in the recent quarter.

The oil and gas explorer produced 22.3 million barrels of oil equivalent in the three months to December, up five per cent on the prior quarter, with full-year production of 87.7 million barrels.

Sales revenue was up nine per cent on the September quarter to more than $1.2 billion, taking full-year sales revenue to more than $4.9 billion despite tough trading conditions, boss Kevin Gallagher said.

The revenue uplift was driven mostly by higher LNG and condensate sales volumes, but partly offset by lower average realised prices across the portfolio, partly due to a milder-than-average European winter.

“The fourth quarter lifted free cash flow for the full year to approximately $1.8 billion, a strong result in a year of relatively soft commodity prices for the industry, which demonstrates the value of our focus on margin in our marketing and trading activities,” Mr Gallagher said.

The future was also looking bright as Santos moved towards first production at its Tikka project in Alaska and as the first LNG cargo from its Barossa project was loaded in Darwin.

Connection failures had delayed Barossa’s planned ramp-up by two months, due to a campaign to shore up similar connections along the Floating Production, Storage and Offloading system.

“We have taken a very considered approach to the final stages of commissioning to ensure offshore operations achieve a steady state, high level of reliability as quickly as possible once full production is achieved,” Mr Gallagher said.

“Our focus is now on safely and reliably increasing Barossa gas production to deliver long-term value for shareholders in line with our FID (financial investment decision) promise.”

Tikka and Barossa, in their first phases, are tipped to boost Santos’s production by about 25 to 30 per cent by 2027 compared to 2024 levels.

Investors responded warmly to the report, buying up Santos shares and sending them more than four per cent higher to $6.36 by 2pm AEDT on Thursday.

The outlook for gas prices in 2026 and 2027 remains positive, with demand expected to pick up due to data centre growth and the energy transition.

Santos will officially announce its full-year results on February 18.

Ghislaine Maxwell, the former girlfriend of billionaire pedophile financier Jeffrey Epstein, will appear before a US congressional committee next month.

The British former socialite, who is serving a 20-year federal prison sentence for sex trafficking, is scheduled to appear virtually before the House Oversight and Government Reform Committee on February 9.

Committee chairman James Comer said Maxwell’s lawyers have indicated she plans to invoke her Fifth Amendment right against self-incrimination.

“I agree we need to hear from Ghislaine Maxwell,” Comer said.

“We’ve been trying to get her in for a deposition.”

The question came in response to mounting pressure from Democrats to press contempt of Congress charges against Maxwell, as well as US attorney general Pam Bondi over the delayed release of Epstein-related documents.

Comer said Maxwell would appear before the committee on February 9 but “her lawyers have made it clear that she’s going to plead the Fifth”.

“I hope she changes her mind, because I want to hear from her.”

Maxwell was originally served with a subpoena in July 2025 to appear the following month, but the committee has refused to grant her immunity in return for testimony.

The committee also voted to advance contempt of Congress resolutions against former president Bill Clinton and his wife, former secretary of state and presidential candidate Hillary Clinton, after both declined to comply with subpoenas calling them to testify before Congress over their friendships with Epstein.

The Clintons have challenged the subpoenas, saying they are politically motived and serve no legislative purpose.

They have both have submitted written statements to the committee.

Angel Urena, a spokesman for the Clintons, said in a post on X that the pair had tried to help with the investigation but “both Clintons have been out of office for over a decade. Neither had anything to do with him for more than 20 years”.

The Oversight Committee is examining Epstein’s network and the government’s handling of records tied to the case.

It comes amid mounting criticism of the US Justice Department over its failure to make public all Epstein-related documents.

Only a fraction of the documents, which US law mandates should only be withheld to protect victims’ identities or active criminal investigations, have been published.

Maxwell appealed against her conviction to the US Supreme Court in October, but it declined to hear her case.

Ranking Democratic committee member representative Robert Garcia accused the US Department of Justice on Wednesday of giving Maxwell “special treatment”.

“For months, Ghislaine Maxwell has defied the subpoena ordering her to testify to the Oversight Committee,” he said in a statement.

“After pressure from Oversight Democrats, Chairman Comer has finally decided to call her in to testify. But let’s be clear: the coverup is continuing. She has gotten special treatment from the DOJ for months. Let’s end the coverup now.”

Japan posted a trade deficit for the fifth straight year in 2025, as concerns continued to grow over US President Donald Trump’s tariffs and Japan’s political rift with neighbouring China.

For the full year, Japan logged a 2.65 trillion yen ($A25 billion) trade deficit, the Finance Ministry reported in its preliminary data on Thursday.

That was nearly 53 per cent smaller than the deficit Japan marked the previous year.

Exports for the year rose 3.1 per cent, while imports remained about the same on-year, gaining less than one per cent.

For the month of December, Japan recorded a 105.7 billion yen ($A989 million) trade surplus.

The monthly surplus was 12 per cent smaller than what was racked up a year ago. Imports grew 5.3 per cent from the same month a year ago, while exports grew 5.1 per cent.

By nation, exports in December declined 11 per cent to the US, while growing to Britain, Africa and to some Asian points like Hong Kong and India. Imports remained strong from Europe but declined from Brazil and the Middle East.

The United States has imposed a 15 per cent tariff on most imports from Japan, a reduction from the 25 per cent that Trump initially proposed but an increase from before.

Another looming concern is the impact on Japanese manufacturing, including automakers, from China’s curbs on exports of rare earths.

The controls were announced by Beijing after Prime Minister Sanae Takaichi suggested a Chinese move on Taiwan could prompt a Japanese military response.

Takaichi may call elections for next month in hopes her party can gain strength in parliament while she is popular with the public.

Overall, Japan’s economy has held up, despite grumbling from the public about rising prices and stagnant wages. The benchmark Nikkei on the Tokyo Stock Exchange keeps hitting new records.

An influential global body has welcomed Labor’s move to reduce superannuation tax concessions and rein in spending but wants more reforms as long-term pressures weigh on the budget.

The Organisation for Economic Co-operation and Development’s missive comes as Treasurer Jim Chalmers progresses reforms from 2025’s productivity roundtable in the lead-up to the May budget.

The Paris-based organisation praised the government’s efforts so far to take up the mantle on reform, citing work aimed at boosting competition and the energy transition.

Dr Chalmers said the report was a powerful endorsement of Labor’s economic management and reform agenda.

“The report describes our new mandatory notification merger regime as ‘a major step forward’ which will ‘bring Australia in line with OECD best practices’ and describes the government’s revitalised National Competition Policy as a positive step to boost competition,” the treasurer said in a statement.

“More homes, more cleaner and cheaper energy and progress on addressing Australia’s longstanding productivity challenge feature prominently in this report and the report also highlights they are big features of Labor’s economic plan.”

But further reforms were needed “to raise productivity growth, improve housing affordability and facilitate the energy transition”, the OECD said in its latest economic survey of Australia, released on Thursday morning, AEDT.

“While Australia has a relatively light government debt burden, long-term pressures need to be addressed,” the report said.

Labor’s move to reduce tax concessions for wealthy retirees was a good start but further changes should be pursued, such as lowering the cap on concessional superannuation contributions from $30,000 per year.

“This would help to return the superannuation system to its original purpose of ensuring adequate retirement incomes rather than providing concessional tax arrangements for wealth accumulation,” the report said.

Australia’s ageing population would heap health and care costs on the budget, which was already forecast to sink to a deficit of $36.8 billion this financial year, the OECD said.

Spending growth in the NDIS needed to be restrained more effectively, it said.

On the other side of the ledger, the report warned the government’s revenue base will be hit as the transition to electric vehicles erodes the fuel tax take, unless Dr Chalmers gets his proposed road user charge over the line.

The OECD, helmed by former coalition finance minister Mathias Cormann, also noted Australia’s high housing costs.

It recommended transitioning away from stamp duty on property purchases in favour of land taxes, and reduce tax concessions on housing like negative gearing and the capital gains discount, to ease price rises.