Macquarie ‘millionaires factory’ put at risk

Good morning, it's Ainsley here in Sydney with all the news you need to start your day.Today's must-reads:• Macquarie's bumper pay at risk f

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Good morning, it's Ainsley here in Sydney with all the news you need to start your day. Today's must-reads: • Macquarie's bumper pay at risk from investor revolt • Westpac CEO urges faster building approvals • Rio Tinto's first-half profit drops

What's happening now

Macquarie's long vaunted money-making machine for top bankers is showing signs of strain after a string of lapses in risk management and senior departures. Macquarie faces potential penalties amounting to hundreds of millions of dollars after drawing the ire of regulators from the US and UK to Australia. Concerns are also mounting among investors as they demand more accountability from management. Westpac Chief Executive Officer Anthony Miller signaled his support for speeding up the process of building houses in Australia as part of reforms to revive the country's moribund productivity performance. "Approval processes are in many ways too slow and too inconsistent," Miller said at a conference.  Rio Tinto's first-half profits fell to the lowest in five years in the latest sign that stagnant prices for key commodities and trade uncertainties unleashed by President Donald Trump are hitting the biggest miners. Rio reported an underlying profit of $4.8 billion, 16% lower than a year earlier and missing analyst estimates. YouTube will be included in Australia's social media ban for children under 16 years of age, an about-face by officials after the Google-owned video site had initially been left out of the legislation.  Photographer: NurPhoto/NurPhoto Australia's core inflation cooled in the three months through June, strengthening the case for the Reserve Bank to ease monetary policy as early as August on signs of abating price pressures.

What happened overnight

Here's what my colleague, market strategist Mike "Willo" Wilson says happened while we were sleeping… The dollar climbed for a fourth day as US consumer confidence increased in July, easing concerns about the outlook for the broader economy. Treasury yields fell after weaker-than-expected job openings data and as stocks turned lower, ending down on the day. The US said it will continue talks with China beyond the tariff deadline. Australian inflation data and New Zealand business confidence are in focus today. Federal Reserve Chair Jerome Powell said interest rates are in the right place to manage continued uncertainty around tariffs and inflation, tempering expectations for a rate cut in September. "There are many, many uncertainties left to resolve," Powell said following the central bank's decision to once again keep rates unchanged.  Jerome Powell, chairman of the US Federal Reserve Photographer: Al Drago/Bloomberg Meta Platforms topped projections for second-quarter sales and gave a stronger-than-expected forecast for the current period, a sign that the social media company's advertising business is still growing quickly enough to support aggressive spending on artificial intelligence. Shares jumped more than 12% in late trading.  Trump said he reached a trade deal with South Korea that would impose a 15% tariff on its exports to the US and see Seoul agree to $350 billion in US investments. The investment fund Trump announced evokes a similar $550 billion account pledged by Japan in a successful bid to lower its threatened tariffs. The rise of data centers mining cryptocurrencies and training AI models is providing a new market for the vast volumes of electricity produced by hydro, writes David Fickling for Bloomberg Opinion. That risks destroying the math that for decades has made dams an essential tool of development.

What to watch

All times Sydney • RBA Deputy Governor Andrew Hauser (9:20 a.m.) • Australia June Building Approvals, Retail Sales (11:30 a.m.)

One more thing...

An Australian rocket crashed shortly after taking off, marking the first attempt to reach orbit with a made-in-Australia vehicle. Space startup Gilmour Space Technologies' first test flight of its Eris rocket left the launch pad at the company's Bowen Orbital Spaceport, about 1,000 kilometers northwest of Brisbane, on Wednesday morning. It flew for about 14 seconds, the company said. The Eris had a minimal payload that included a jar of Vegemite.

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