Regulator probes private credit manager

Good morning and welcome back, it's Ainsley here with all the news you need to start your working week.Today's must-reads:• Private credit m

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Good morning and welcome back, it's Ainsley here with all the news you need to start your working week. Today's must-reads: • Private credit manager probed • Indonesia plans first kangaroo bond • A dairy drought looms

What's happening now

Australia's corporate watchdog is scrutinizing private credit manager Metrics Credit Partners due to concerns over loan valuations and governance practices, according to people with knowledge of the matter. The probe is part of a two-year review of private markets that the Australian Securities & Investments Commission is conducting across the industry. Metric Credit said yesterday that it's unaware of any investigation. Indonesia is set to issue its first Australian dollar-denominated debt as the two countries strengthen their financial partnership. The development follows South Korea's announcement in November that it planned to issue its first Kangaroo bonds to try lure foreign investment. A dairy drought is looming with consumption of milk expected to grow faster in the next decade than any other agricultural commodity, writes David Fickling for Bloomberg Opinion. If we want to reduce milk's carbon footprint, we're going to need to produce it more efficiently, rather than hoping the problem will just go away.

What happened overnight

Here's what my colleague, market strategist Mike "Willo" Wilson says happened while we were sleeping… US stocks wavered Friday amid earnings results and yields fell on calls for the Fed to cut interest rates. The yen rose in early Sydney trade Monday despite a weekend defeat in upper house elections for the ruling party. Offshore sees the European Central Bank consider the euro-area tariff response in its policy rate decision. Locally, New Zealand's inflation data out shortly may see the kiwi dollar take losses into a third week while Australia has RBA minutes of its July meeting on Tuesday. ASX futures point to a weak opening. More about Japan's election, Prime Minister Shigeru Ishiba said he intended to stay on even as his ruling coalition suffered a historic setback in the upper house election, an outcome that may further unsettle markets. The ruling Liberal Democratic Party along with longtime partner Komeito lost its majority in the chamber, public broadcaster NHK reported, saying the bloc failed to win the 50 seats it needed to maintain control.  Shigeru Ishiba departs the party's headquarters following the upper house election in Tokyo on July 21. Photographer: Toru Hanai/Bloomberg European Union envoys are set to meet as early as this week to formulate a plan for measures to respond to a possible no-deal scenario with President Donald Trump, whose tariff negotiating position is seen to have stiffened ahead of an Aug. 1 deadline. The US is now said to be pushing for a near-universal tariff exceeding 10% on EU goods, with fewer exemptions.  Wall Street is on the hunt for the perfect Jerome Powell hedge as Trump pressures the Fed chief to lower rates. Investors are exploring strategies like buying short-term Treasuries and selling long-term notes.

What to watch

All times Sydney • 8:45 a.m.: New Zealand 2Q CPI

One more thing...

Elon Musk's empire is creaking under the strain of his antics. Musk is rich on paper, but he's also cash poor, dependent in large part on the stock price of Tesla, on continued good relations with the US government and on his continued ability to raise almost limitless sums of money from investors. Each leg of that stool seems wobblier than ever: Tesla's stock price has fallen precipitously, Trump and Musk are sniping at each other in public, and even some of the staunchest pro-Musk investors are issuing vague warnings about the need for Tesla's board to get involved. Read more in our Big Take.

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