Crypto News: Economic weakness persists

Good morning, it's Harry here in Sydney, where a bright spring morning makes it easy to forget that the economic data is somewhat less sunny…

Today's must-reads:
• GDP dropped 1% on the year
• New Zealand home prices fell again
• The government will release new AI rules

Australia's economic weakness persisted in the three months through June as consumers hunkered down in the face of elevated borrowing costs and stubbornly sticky inflation. Gross domestic product advanced 0.2% from the prior quarter, helped by government spending and matching economists' estimate, official data showed Wednesday. All eyes will be on Reserve Bank Governor Michele Bullock this afternoon, when she delivers a speech on the costs of high inflation at the Anika Foundation.

Australia's sovereign wealth fund has been adding distressed debt to its hefty private markets portfolio. "On the distressed side, there are some pockets of opportunity, particularly in real estate and some private equity," said Future Fund Chief Executive Officer Raphael Arndt. The A$225 billion ($151 billion) fund posted a 9.1% annual return thanks to buoyant stocks and strong private markets.

Blackstone Inc. has agreed to buy data-center operator AirTrunk in a deal valuing the firm at A$24 billion, including debt and capital expenditure for committed projects. Blackstone, along with Canada Pension Plan Investment Board, is buying AirTrunk from Macquarie Group and PSP Investments, according to a statement. The deal is pending regulatory approval by the Australian Foreign Investment Review Board.

New Zealand house prices fell for a sixth straight month in August, weighed down by elevated interest rates and uncertainty over job security in a weakening economy, according to CoreLogic Inc. Values dropped 0.5% from July, when they declined a revised 1%, the property consultancy said. Prices rose 0.7% in August from a year earlier, slowing from a 2.2% pace.

Houses in the Orewa area of Auckland, New Zealand. Photographer: Fiona Goodall/Bloomberg

The government is releasing potential AI guardrails. Establishing "meaningful" human oversight of high-risk research is one of 10 potential mandatory guidelines to be released for consultation today. The measures will come into effect voluntarily immediately, with the government to consult on making them mandatory. Generative AI could be worth as much as an estimated A$115 billion ($77.2 billion) annually to the nation's economy by 2030. Meanwhile, there are two radically different visions of our AI future, and they depend on the cost of energy, writes Tyler Cowen for Bloomberg Opinion.

Louis Dreyfus says it got Foreign Investment Review Board approval for its proposed takeover of Australia's Namoi Cotton after the crop trader agreed to measures that would allay competition concerns. Louis Dreyfus and rival trader Olam Agri Holdings have been jostling to buy Namoi since January.

US Treasuries jumped, with a key segment of the yield curve briefly turning positive, as weaker-than-expected job openings data bolstered bets on steeper Fed interest rate cuts. The S&P 500 fell and Nvidia's two-day selloff hit 11%. Australian equities futures are in the green.

A Canadian election may be on the cards soon after a parliamentary pact that has kept Canadian Prime Minister Justin Trudeau's Liberal Party in power fell apart.

Vice President Kamala Harris called for a 28% capital gains tax rate on people earning $1 million or more, touting it as a measure that would ensure the wealthy paid their fair share as she sought to detail her economic agenda and draw a contrast with Republican rival Donald Trump. Meanwhile, Trump and running mate JD Vance are campaigning on a grab bag of tax cut proposals that could collectively cost as much as $10.5 trillion over a decade.

US President Joe Biden is preparing to block Nippon Steel Corp.'s $14.1 billion takeover of United States Steel Corp., Bloomberg News reported. But US Steel, responding on Wednesday evening, vowed to "pursue all possible options under the law to ensure" that the sale is completed. The gap between US Steel's stock price and the price proposed by its Japanese rival exploded as traders ditched shares amid fears the deal may collapse.

• 11:30 a.m.: Australia July Trade Data
• 1:05 p.m.: Reserve Bank Governor Michele Bullock speaks

In a suite of Dallas offices featuring wood-paneled corridors decorated with antique maps and century-old photos from the Hunt family oil company, a pair of billionaire brothers are plotting global sports dominance. Read our profile of Dan and Clark Hunt, who control a $6.5 billion empire with a portfolio of teams across the National Football League, Major League Soccer and the National Basketball Association.

Archival family photos in Dan and Clark Hunt's suite at Toyota Stadium. Photographer: Nitashia Johnson/Bloomberg

Stay updated by saving our new email address

Our email address is changing, which means you'll be receiving this newsletter from noreply@news.bloomberg.com. Here's how to update your contacts to ensure you continue receiving it:

Gmail: Open an email from Bloomberg, click the three dots in the top right corner, select "Mark as important."
Outlook: Right-click on Bloomberg's email address and select "Add to Outlook Contacts."
Apple Mail: Open the email, click on Bloomberg's email address, and select "Add to Contacts" or "Add to VIPs."
Yahoo Mail: Open an email from Bloomberg, hover over the email address, click "Add to Contacts."