Crypto News: Banks face earnings pain

Good morning, it's Ben here on a cloudy Canberra morning. Here's what's making news today.

Today's must-reads:
• Banks set for difficult earnings season
• Albanese pushed to help detained writer
• New liability for nature-based risks

Australia's biggest banks are gearing up for a grueling earnings season over the coming weeks amid rising costs and intensifying competition for home loans. With less of a tailwind from rising interest rates, investors are now focusing on how far net interest margins can fall.

The IMF has urged Australia to tighten its monetary policy further amid concerns that inflation may be stickier than previously thought. In a staff report published Wednesday, the fund said cuts to government spending, particularly on infrastructure, would be needed to help ensure inflation returned to the 2-3% target range by 2025.

Prime Minister Anthony Albanese is facing pressure from the family of detained Australian writer Yang Hengjun to press for their father's release when he flies to China on Saturday, the first visit by a sitting PM since 2016. Yang has been held by the Chinese government for more than four years and there are growing concerns about his health.

Chinese-Australian writer Yang Hengjun in 2010. Photographer: Zhan min/AP Photo

Australian companies and directors could face legal action if they fail to account for nature-based risks, according to a new opinion released on Thursday backed by lawyers and environmental groups. Under the Australian Corporations Act, directors could be held personally liable for environmental risks, with penalties including large fines and being disqualified from managing a company.

Less than a third of Gen Z Americans say they are feeling financially secure, with just over half saying they are "very or extremely worried" about not having enough money. That problem isn't going to go away, writes Erin Lowry for Bloomberg Opinion.

The US Federal Reserve held interest rates steady for the second meeting in a row on Wednesday, but Chair Jerome Powell made it clear he was leaving the door open to further hikes to tame inflation. Powell said he wasn't confident yet whether or not monetary policy was strict enough to bring inflation back to the 2% target.

Wall Street saw a rally in stocks and bonds on Wednesday after the Fed's hold. With the market apparently betting that Powell is done with hikes, the S&P 500 climbed over 1%.

Jerome Powell, chairman of the US Federal Reserve. Photographer: Al Drago/Bloomberg

The first group of US citizens has been allowed to leave the Gaza Strip, the State Department said Wednesday. A number of foreigners and wounded Palestinians have passed through Rafah and arrived in Egypt, following a Qatar-mediated deal.

• Australian trade data for September will be released at 11:30 a.m. Sydney

It used to be one of the sleepiest corners of finance. But thanks to a post-pandemic surge in inflation, US Treasury bonds are now catnip for speculators. California hedge fund founder Vineer Bhansali says he now wakes up every two hours at night to check prices. "This is probably one fo the best times to get in the bond market in 20 years," he said.